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Supervisory Insights

Summer 2011 Vol. 8, Issue 1 - Table of Contents

Last Updated: June 14, 2023

Supervisory Insights - Summer 2011 - PDF

Letter from the Director


Managing Risks in Third-Party Payment Processor Relationships

An increasing number of financial institutions are entering deposit relationships with third-party payment processors that effect payment transactions for merchant clients. This activity can expose institutions to risks not present in other commercial customer relationships. This article explains the role of third-party payment processors, identifies warning signs that may indicate heightened risk in a payment processor relationship, and discusses the controls that should be in place to manage this risk. (Revised July 2014).

Regular Features

From the Examiner’s Desk: SBA Lending: Insights for Lenders and Examiners

The FDIC encourages banks to lend to credit-worthy small businesses. The guaranty that accompanies a Small Business Administration (SBA) loan is increasingly attractive to banks looking to expand lending opportunities. Banks that wish to participate in SBA lending programs need to develop specialized expertise. This article reviews the SBA products lenders most often use and provides useful information for institutions about the technical requirements for underwriting, servicing, risk grading, liquidating and selling SBA loans. The article also provides information that may be helpful for examiners when reviewing bank SBA loan portfolios.

Regulatory and Supervisory Roundup

This feature provides an overview of recently released regulations and supervisory guidance.

Supervisory Insights

Supervisory Insights is published by the Division of Risk Management Supervision of the Federal Deposit Insurance Corporation to promote sound principles and best practices for bank supervision.

Sheila C. Bair
Chairman, FDIC

Sandra L. Thompson
Director, Division of Risk Management Supervision

Journal Executive Board

Division of Risk Management Supervision
George E. French, Deputy Director and Executive Editor
Christopher J. Spoth, Senior Deputy Director
Victor J. Valdez, Deputy Director
James C. Watkins, Deputy Director

Division of Depositor and Consumer Protection
Sylvia H. Plunkett, Senior Deputy Director
Jonathan N. Miller, Deputy Director
Robert W. Mooney, Deputy Director

Regional Directors
Thomas J. Dujenski, Atlanta Region
Kristie K. Elmquist, Acting Regional Director, Dallas Region
Daniel E. Frye, Acting Regional Director, New York Region
Stan R. Ivie, San Francisco Region
James D. La Pierre, Kansas City Region
M. Anthony Lowe, Chicago Region

Journal Staff

Kim E. Lowry
Managing Editor

Jane Coburn
Financial Writer

Estela R. Gauna
Financial Writer

Supervisory Insights is available online by visiting the FDIC’s website at To provide comments or suggestions for future articles, request permission to reprint individual articles, or to request print copies, send an e-mail to

The views expressed in Supervisory Insights are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. In particular, articles should not be construed as definitive regulatory or supervisory guidance. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation.