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BOARD OF GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D.C. 20551 

DIVISION OF BANKING

SUPERVISION AND REGULATION

SR 12-14 

October 31, 2012 

TO THE OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE

 SUPERVISORY AND EXAMINATION STAFF AT EACH 

 FEDERAL RESERVE BANK, AND TO BANKING 

 ORGANIZATIONS SUPERVISED BY THE FEDERAL RESERVE

SUBJECT: Revised Guidance on Supervision of Technology Service Providers 

Applicability to Community Banking Organizations: This guidance is primarily applicable to 

field examiners and supervisory staff with responsibility for the review of technology service 

providers. Nevertheless, banking organizations with $10 billion or less in consolidated assets 

that have relationships with technology service providers may find the guidance useful. 

The Federal Financial Institutions Examination Council (FFIEC) is issuing an updated 

“Supervision of Technology Service Providers Booklet” (TSP Booklet) that provides guidance to 

examiners, financial institutions, and technology service providers on the supervision of 

technology service providers. The revised TSP Booklet is part of the FFIEC Information 

Technology Examination Handbook (IT Handbook). Concurrently, the Federal Reserve Board, 

the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency 

(collectively, the agencies) are issuing related “Administrative Guidelines - Implementation of 

Interagency Programs for the Supervision of Technology Service Providers” (Guidelines).1

 

Electronic versions of the TSP Booklet, the Guidelines, and the other IT Handbook

booklets, are available on the FFIEC IT Examination Handbook InfoBase 

(http://ithandbook.ffiec.gov/). More specifically, the Guidelines are available in the Reference 

Materials page on the FFIEC IT Examination Handbook InfoBase. 

The TSP Booklet addresses the agencies’ statutory authority to supervise third-party 

servicers that enter into contractual arrangements with regulated financial institutions. 

Additionally, the TSP Booklet outlines the agencies’ risk-based supervisory program and 

 

1 The Guidelines and the corresponding updates to the TSP Booklet rescind FFIEC Supervisory Policy-1, 

“Interagency EDP Examination, Scheduling, and Distribution Policy” (September 1991), and FFIEC Supervisory 

Policy-11, “Enhanced Supervision Program (ESP) for Multidistrict Data Processing Servicers (MDPS)” (January 

1995). In addition, SR letter 95-7, “Enhanced Supervision Program for Multidistrict Data Processing Servicers,” is 

being superseded with the issuance of the revised TSP Booklet.
 

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emphasizes that a financial institution’s management and board of directors have the ultimate 

responsibility for ensuring outsourced activities are conducted in a safe and sound manner and in 

compliance with applicable laws and regulations. 

Although closely related to the TSP Booklet, the Guidelines are not part of the IT 

Handbook. The Guidelines describe the process that the agencies follow to implement the 

interagency supervisory programs and include the reporting templates examiners use throughout 

the supervisory cycle. The primary audience for these Guidelines is the agencies’ management 

and field examiners. The agencies will make revisions or additions to the Guidelines on an 

ongoing basis as necessary. 

Reserve Banks are asked to distribute this letter to the Federal Reserve-supervised 

banking organizations in their Districts, as well as to their supervisory and examination staff. 

Please direct any questions regarding the revised guidance to Adrienne Haden, Assistant 

Director, Operations and Information Technology Policy, at (202) 452-2058, or Elton Hill,

Senior Supervisory Financial Analyst, Operations and Information Technology Policy, at 

(202) 452-2514. In addition, questions may be sent via the Board’s public website.2

 

Michael S. Gibson

Director

Supersedes: 

• SR letter 95-7, “Enhanced Supervision Program for Multiregional Data Processing 

Servicers”

 

2 See http://www.federalreserve.gov/apps/contactus/feedback.aspx.