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Regulatory Reform – What Does It Mean for Third Party Risk Management?

Aug 8, 2018 by Branan Cooper

A great deal of news recently has followed the various congressional initiatives to “roll back” portions of the Dodd-Frank Act. In the latter portion of the second quarter, a bill passed and was signed into law creating some regulatory relief. With that being said, if you’re a compliance officer or risk manager, you may be thinking it’s time to party, right?

Well, slow down on the streamers and confetti for a moment – while there's no doubt there are some real elements of relief, like raising the asset threshold and numerous other initiatives, there’s nothing that’s going to immediately translate into real relief for the world of third party risk management. In fact, in discussions with legal experts and former regulatory managers, they helped to remind me that regulatory reform, even if it did touch third party risk management, can be every bit as stressful as increased regulatory scrutiny.

Regulatory Reform Is as Stressful as Regulatory Scrutiny

Why is this the case? Here are three reasons: 

  1. Managing regulatory change is utterly confusing. Understanding the current rules of the game are hard enough to follow and execute well but trying to interpret the new rules and comprehend precisely what that means to your organization today, tomorrow and when these changes actually take effect, can be even more stressful.

  2. Regulatory expectations are actually increasing. This is particularly true for credit unions or those involved with handling sensitive data. You’ll see that it’s a very tough time to be in the compliance and risk business.

  3. The board and senior management may think it’s time to sit back and relax – which is incorrect. They have likely read the headlines – and only the headlines – and thought that this is time to let things slack off a bit. They’d be quite wrong and it’s now up to you to make sure they are aware of the continued heightened expectations.

What Can You Do?

We always recommend keeping close tabs on the regulatory developments and, fortunately, there are some terrific sources to do so. Utilize industry newsletters, like American Banker and Credit Union Journal, as well as legal analysis available in sources like JD Supra and Ballard Spahr. There is a wealth of information readily available.

Stay informed, stay vigilant and keep doing the job well – that’s the recipe for success in today’s confusing regulatory environment. Now is not the time to perform less.

Need help keeping track of regulations? Download our eBook now.

third party risk regulations

Branan Cooper

Written by Branan Cooper

Branan Cooper is the Chief Risk Officer at Venminder. Branan has more than 25 years of experience in the financial services industry with a focus on the management of internal processes and controls—most notably in the area of third party risk and operational compliance. Branan leads the Venminder delivery team as the third party risk management subject matter expert in residence. Branan joined Venminder from the Bancorp Bank where he held the position of Senior Vice President and Director of Third Party Risk Management. He was instrumental in creating their Third Party Risk Management Program and implementing numerous enterprise-wide initiatives. Branan has held similar positions with PartnersFirst, the credit card division of Western Alliance Bancorp, and at MBNA America, as an Executive Vice President working as part of the risk management/ compliance integration team as the company was acquired by Bank of America. Branan is frequently featured as a speaker at industry events, addressing topics on operational and compliance aspects of third party risk. Branan received his undergraduate degree from Duke University, and he completed the Graduate School of Retail Bank Management (CBA) and the Graduate School of Compliance Management (ABA).

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