Question

If a bank contracts with third parties (including affiliates) to provide retirement plan products and services, the banks are subject to OCC Bulletin 2013-29 Third Party Relationships: Risk Management Guidance which recommends that it is reviewed at least every:

a. other year.
b. 3 years.
c. 2 years.
d. 5 years.

Answer 1

Banks engaged with third parties for retirement plan products and services are recommended by OCC Bulletin 2013-29 to have their relationships reviewed at least every three years. This measure aims to improve oversight and prevent financial issues like those seen during the 2008-2009 recession.

Step-by-step explanation:

If a bank contracts with third parties to provide retirement plan products and services, it is subject to OCC Bulletin 2013-29. Under this guidance, it is recommended that the bank's third-party relationships and activities be reviewed every three years. This periodic review is crucial for ensuring ongoing compliance with regulatory standards and for addressing any risks associated with third-party relationships.

In light of past regulatory challenges, notably the recession of 2008-2009, which exposed the banks' vulnerabilities and the oversight limitations of bank regulators, the frequency of these reviews takes on added significance. The aim is to prevent the accumulation of substantial risks and losses by enabling earlier detection and response to potential issues arising from third-party engagements.