WASHINGTON (Reuters) - U.S. regulators on Wednesday warned banks to watch out for risky practices by outside companies to which they have outsourced customer service and other activities.
“We have concerns regarding the quality of risk management on the growing volume, diversity and complexity of banks’ third-party relationships, both foreign and domestic,” Comptroller of the Currency Thomas Curry said in a statement.
Regulators have warned about banks’ contracts with vendors and other business arrangements with outside firms for more than a year.
In June 2012, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau fined Capital One Financial (COF.N) after external call center employees were said to mislead consumers about some credit card products.
The OCC said banks should craft a plan that lists the potential risks of third parties’ activities and spells out how the bank will select and oversee those vendors.
The guidelines also called for banks to conduct reviews of risk management practices, assign particular individuals to oversee vendors and monitor third parties’ performance.
Reporting by Emily Stephenson; Editing by Lisa Von Ahn