Why It's Important to Stay Abreast of New Vendor Management Regulatory Guidance
Stay up-to-date on regulatory guidance.
Learn why you should stay up-to-date on vendor management regulations and how to stay prepared and in compliance.
Welcome to today’s Third Party Thursday! My name is Branan Cooper and I’m the Chief Risk Officer here at Venminder. Today, let’s take a look at why it is important to stay abreast of new regulatory guidance.
Did you know that Shakespeare tried to put banks out of business? Well, sort of – remember the famous words from Hamlet as spoken by Polonius, “Neither a borrower nor a lender be,” – so, if a bank doesn’t have the opportunity to make loans or book deposits, you don’t have much of a bank.
Similarly, if you don’t stay up to date on new regulations, you’ll find yourself out of compliance and perhaps out of business. The best way to prepare is to be well ahead of the curve and pay attention to articles and releases from the regulatory agencies on what their priorities are. The Consumer Financial Protection Bureau (CFPB) regularly issues updates like their Spring Rulemaking Agenda and also often provides advanced notice of proposed rulemaking.
Some new guidance has a long time to prepare for its effective date; witness the recent new FinCEN rules which have a two year implementation window, going into effect in May 2018. Other guidance is nearly immediate, so it pays to keep tabs on what’s changing. There is a lot of reading material available and, even if you don’t have time to plow through draft guidance that is often hundreds of pages long, law firms and industry advocacy groups almost always publish insightful commentary and analysis.
That said, you should absolutely read the final rules that are issued in detail and stack them up against your program. Consult with your internal auditors, compliance staff or in-house counsel for more advice.
Never assume a new rule has let stand old information, unless they specifically say so. For example, when the FFIEC recently updated Appendix E on mobile banking, there were over a dozen references to third party providers. All of that is prescriptive in nature and should give you hints as to where your next exam may focus.
Again, I’m Branan and thank you for listening! Don’t forget to subscribe to the Third Party Thursday series.
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