Four U.S. financial regulators have proposed nonbinding third-party risk-management guidance that would allow banks and credit unions to calibrate oversight to the risk posed by each outside relationship. The Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration and Office of the Comptroller of the Currency would replace guidance issued in 2023 and 2024 after a 60-day public-comment period following Federal Register publication. The proposal lets institutions use proportionate due diligence, contracts and monitoring for lower-risk providers, while retaining responsibility for outsourced services such as payments, cybersecurity, digital banking, fraud detection and anti-money-laundering systems. The Federal Reserve also proposed a practical companion guide for locally focused banks with less than $30 billion in assets, while the Fed, FDIC and OCC outlined supervisory concerns involving concentrated core-service-provider markets. Comptroller of the Currency Jonathan V. Gould said the changes would reduce unnecessary friction and help banks manage vendor relationships according to their scale, complexity and risk profile. Federal Reserve Governor Michael Barr dissented, warning that the proposals could weaken early intervention and leave consumer-protection and complex bank-fintech arrangements without sufficiently clear guidance. Governor Lisa Cook supported revising the framework while seeking comments on cybersecurity, record management, consumer protection and anti-money-laundering responsibilities in bank-fintech partnerships. The technology-neutral framework can also encompass providers of crypto custody, stablecoin, payment and blockchain services to regulated banks.