WASHINGTON (4/16/12)--The Consumer Financial Protection Bureau (CFPB) last week reminded its supervised financial institutions that they could be held responsible for the actions of third-party service providers they contract with, and said it would "take a close look at service providers' interactions with consumers."
The CFPB said it expects the financial institutions that it supervises to maintain effective processes for coping with some of the risks that working with third party vendors can pose. The agency suggested that financial institutions:
- Conduct adequate due diligence;
- Review vendor policies, procedures, internal controls, and training materials to ensure they meet high standards;
- Inform third party vendors of their expectations regarding compliance, and of the consequences of noncompliance;
- Establish internal controls and monitoring methods to determine vendor compliance; and
- Quickly address any consumer issues that may arise due to vendor actions.
For the full CFPB release, use the resource link.