SR 11-7

The federal banking regulators' long-standing supervisory guidance on model risk management, requiring a bank to validate a model's data inputs and performance before and during deployment, and the existing institutional channel this topic points to for testing a vendor's synthetic-data and model-collapse claims.

The Federal Reserve and OCC's "Supervisory Guidance on Model Risk Management" (issued April 4, 2011), which requires banks to independently validate any model that drives a decision, across its lifecycle (conceptual soundness, ongoing monitoring, outcomes analysis), including vendor and AI models.

The Federal Reserve and Office of the Comptroller of the Currency's joint supervisory guidance, "Guidance on Model Risk Management," issued April 2011, requiring banks to validate, document, test, and independently review any model used in a material business decision.

The Federal Reserve's model-risk-management supervisory letter, enforced in practice primarily by bank examiners rather than by a Federal Reserve Governor directly on any single institution's specific AI model.

The Federal Reserve's supervisory guidance requiring banks to document, validate, and govern the models, including AI-driven models, they use for lending, underwriting, and risk decisions, creating a prudential regulatory exposure layer distinct from private tort liability.