Product Updates for September 2021
The Product Updates for September 2021 from BankPolicies.com feature the following new and revised policy template products:
These new and updated products are in response to the Joint Press Release entitled “Agencies Issue Guide to Help Community Banks Evaluate Fintech Relationships” dated 08/27/21 that released a guide intended to help community banks assess risks when considering relationships with financial technology (fintech) companies; and
Community banks are entering into business arrangements with fintech companies to offer enhanced products and services to their customers, increase efficiency, and reduce internal costs. This guide is intended to serve as a resource for community banks when performing due diligence on prospective relationships with fintech companies.
Due diligence is an important component of an effective third-party risk management process. The guide covers six key areas of due diligence that community banks can consider when exploring arrangements with fintech companies: business experience and qualifications, financial condition, legal and regulatory compliance, risk management and control processes, information security, and operational resilience. The guide highlights practical sources of information that may be useful when evaluating fintech companies.
In addition, the new and revised templates incorporate some key elements outlined in the Federal Reserve’s Press Release entitled “Federal Reserve Publishes Paper Describing Landscape of Partnerships Between Community Banks and Fintech Companies” dated 09/09/21 that describes the landscape of partnerships between community banks and fintech companies. The paper captures insights gathered from extensive outreach with community banks, fintechs, and other stakeholders. The outreach involved discussions focused on the strategic and tactical decisions that support effective partnerships.
The complete contents of the new Financial Technology Company Providers Policy Template are included as Topic 20 within the Vendor Management Program Policy Template.
The update to these products is in response to OCC Bulletin 2021-38 entitled “Liquidity: Updated Comptroller’s Handbook and Rescissions” dated 08/16/21 that replaces version 1.0 of the “Liquidity” booklet issued in June 2012, and rescinds OCC Bulletin 2012-17, “Liquidity: Comptroller’s Handbook Revisions and Rescissions.” The updated booklet:
- Discusses risks associated with liquidity;
- Includes information and examination procedures about liquidity coverage ratio and net stable funding ratio requirements;
- Reflects changes in regulations since the booklet was last updated;
- Reflects relevant OCC issuances published since this booklet was last updated;
- Includes clarifying edits regarding supervisory guidance, sound risk management practices, or legal language; and
- Revises certain content for general clarity.
As a reminder, the complete contents of the Liquidity Contingency Funding Plan Policy Template are included as Topic 7 within the Asset, Liability and Liquidity Management Policy Template.
The update to these products is in response to the FFIEC’s Press Release entitled “Authentication and Access to Financial Institution Services and Systems” dated 08/11/21 that provides financial institutions with examples of effective authentication and access risk management principles and practices for customers, employees, and third-parties accessing digital banking services and information systems. The guidance replaces previous documents issued in 2005 and 2011.
The update to this product is in response to a revised version of the FDIC’s Consumer Compliance Examination Manual dated 08/25/21 that updated the Fair Housing Act chapter (V-8.1) which now conforms to changes in advertising rules and disclosure and recordkeeping requirements.
The update to this product is in response to OCC Bulletin 2021-39 entitled “Model Risk Management: New Comptroller’s Handbook” dated 08/18/21 that announced the release of a new booklet used in connection with the examination and supervision of banks. This booklet:
- Presents the concepts and general principles of model risk management;
- Informs and educates examiners about sound model risk management practices that should be assessed during an examination;
- Provides information needed to plan and coordinate examinations on model risk management, identify deficient practices, and conduct appropriate follow-up; and
- Is now part of the Safety and Soundness series of the Comptroller’s Handbook.
The update to this product is in response to the Federal Reserve’s Final Rule issued on 09/08/21 that revises the rate of interest paid on balances maintained to at Federal Reserve Banks by or on behalf of eligible institutions (“IORB” rate). The final amendments specify that IORB rate is 0.15 percent, an .05 percentage point increase from its prior level. The amendment is intended to establish the IORB rate at a level consistent with maintaining the Federal funds rate in the target range established by the Federal Open Market Committee (‘‘FOMC’’ or ‘‘Committee’’). This amendment does not reflect a change in the stance of monetary policy. The Federal Reserve Board is also making certain conforming deletions for clarity to the provisions of Regulation D governing interest payable on balances at Reserve Banks.
The amendments to part 204 (Regulation D) are effective September 8, 2021, and the IORB rate change was applicable on July 29, 2021.
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