SL No. 07-01 – ​Evaluating Third Party Relationships

The Supervisory Letter provides guidance to credit unions on managing third-party relationships. The letter emphasizes that third-party relationships, when properly managed and controlled, can offer a wide range of benefits to credit unions and their members, including expertise, economies of scale, and access to new members. However, these relationships also present potential risks that credit unions must carefully consider and manage.

“Credit unions outsourcing functions without the appropriate level of due diligence and oversight may be taking on undue risk. Ultimately, credit unions are responsible for safeguarding member assets and ensuring sound operations irrespective of whether or not a third party is involved.”