On July 29, 2016, the board of directors of the Federal Deposit Insurance Corporation (FDIC) released a proposal regarding third-party lending guidance (“Proposed Guidance”) as part of a package of materials designed to “improve the transparency and clarity of the FDIC’s supervisory policies and practices.” The Proposed Guidance elaborates on previously issued agency guidance on managing third-party risks and, if finalized, could apply to all FDIC-supervised institutions that engage in third-party lending programs.

The Proposed Guidance affirms that an institution’s board of directors and senior management are responsible for managing, identifying and controlling the risks associated with lending activities conducted through third parties, and the FDIC will evaluate third-party lending activities conducted on behalf of a financial institution as though the institution itself had performed those activities.