Comments in Response to Proposed Interagency Guidance on Third-Party Relationships

Abstract

In a letter to the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, the Student Borrower Protection Center offers comments on proposed interagency guidance for banking organizations on managing risks associated with third-party relationships.

The letter highlights the key role that consumer protection must play in the agencies’ view of holistic risk management and points to specific areas where these risks may arise in the context of banks’ third party relationships. The letter cautions against lax oversight of arrangements between schools and lenders, and of efforts at regulatory arbitrage.

Keywords: student debt, student loan, federal reserve, banking

JEL Classification: I22, I23