In October 2016, the Consumer Financial Protection Bureau (CFPB) amended its service provider guidance (previously published in the Federal Register in 2012).
The amendments are largely a re-release of CFPB Bulletin 2012-13, but the amended guidance serves as a reminder that vendor management is a significant focus of the CFPB and other supervisory agencies.
In addition to what the CFPB views as key vendor management requirements, credit unions should review National Credit Union Administration (NCUA) guidance in this area, including NCUA Supervisory Letter 07-01. A key component of vendor management is to end up with a contractual arrangement that adequately protects the credit union and accurately details the obligations of the vendor.
NCUA guidance advises credit unions that "it is prudent to seek qualified external legal counsel to review prospective third party arrangements and contracts."
We have helped many clients establish appropriate vendor management programs and we provide many of our clients with contract review/negotiation assistance.
Please contact Christopher Rahl for questions concerning vendor management in general or for assistance with vendor contract review.