FDIC OCC Federal Reserve Issue Revised Model Risk Management Guidance
Summary
The FDIC, OCC, and Federal Reserve Board issued revised model risk management guidance for banking organizations. The guidance clarifies that model risk management should be tailored to each organization's size, complexity, and model risk profile, highlighting principles for effective model development, validation, monitoring, and governance. The document rescinds two prior FDIC Financial Institution Letters. The guidance explicitly states it does not create enforceable standards and non-compliance will not result in supervisory criticism.
What changed
The agencies revised existing model risk management guidance to clarify that model risk management practices should be commensurate with a banking organization's size, complexity, and model risk profile. The revised guidance addresses factors influencing model risk, effective model development and use, validation and monitoring practices, and governance and controls. It also includes new considerations for vendor and third-party products. The agencies rescinded FIL-22-2017 on supervisory guidance adoption and FIL-27-2021 on BSA/AML and OFAC model risk management.\n\nBanking organizations should review their model risk management frameworks to align with the revised principles, particularly regarding vendor and third-party model validation requirements. While the guidance is non-binding and creates no enforceable obligations, it reflects supervisory expectations that examiners may consider during safety and soundness examinations. Banks should ensure their governance and validation practices address the sound principles outlined in the guidance.
Archived snapshot
Apr 18, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Agencies Issue Revised Model Risk Guidance
April 17, 2026 WASHINGTON – The Federal Deposit Insurance Corporation (FDIC), along with the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, today issued revised model risk management guidance.
The revised guidance clarifies that model risk management should be tailored commensurately to the size, complexity, and model risk profile of a banking organization. To support banking organizations’ model risk management practices, the revised guidance highlights sound principles for effective model risk management—in particular, by discussing the factors that influence model risk and the features of effective model development and model use; model validation and monitoring; and governance and controls. The revised guidance also discusses considerations specific to vendor and other third-party products, including validation of these products. The guidance does not set forth enforceable standards or prescriptive requirements, and non-compliance will not result in supervisory criticism.
In connection with the release of this guidance, the FDIC is rescinding FIL-22-2017, Adoption of Supervisory Guidance on Model Risk Management, and FIL-27-2021, Bank Secrecy Act: Agencies Address Model Risk Management for Bank Models and Systems Supporting Bank Secrecy Act/Anti-Money Laundering and Office of Foreign Assets Control Compliance.
Attachment(s)
Model Risk Management - Revised Guidance
Contact(s)
MediaRequests@fdic.gov
Last Updated: April 17, 2026
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