Summary:

The FDIC is adopting the Supervisory Guidance on Model Risk Management previously issued by the Board of Governors of the Federal Reserve System ("FRB") (SR 11-7) and the Office of the Comptroller of the Currency ("OCC") (OCC Bulletin 2011-12), with technical conforming changes, thereby making the guidance applicable to certain FDIC-supervised institutions. The guidance addresses supervisory expectations for model risk management, including: model development, implementation, and use; model validation; and governance, policies, and controls. The FDIC is adopting this guidance to facilitate consistent model risk-management expectations across the banking agencies and industry.

Statement of Applicability to Institutions under $1 Billion in Total Assets: It is not expected that this guidance will pertain to FDIC-supervised institutions with under $1 billion in total assets unless the institution's model use is significant, complex, or poses elevated risk to the institution.