ABA Applauds Banking Agencies’ Updates to Model Risk Management Guidance

"We applaud the federal banking agencies for issuing necessary, practical and actionable updates to their model risk management guidance today. In many cases, banks' use of artificial intelligence is evaluated under this framework, and prior guidance predated significant technological developments, including generative AI. This created a great deal of regulatory uncertainty and adversely impacted banks' ability to innovate.

"ABA has consistently urged regulators to update these materials to provide additional clarity about regulatory expectations given developments in the market, the broader AI technology stack and bank internal controls. The revised guidance will help banks of all sizes, particularly community banks, continue to pursue responsible innovation by making it clear generative and agentic AI are outside the scope of the guidance. We appreciate that the federal banking agencies are planning to issue a request for information focusing on banks' use of AI, including generative AI and agentic AI.

"As highly regulated institutions, banks apply a robust 'three lines of defense' framework to their operations, including the use of AI. The updates to the model risk management guidance help ensure banks are evaluated using appropriate metrics. As AI adoption expands across the economy, the banking industry's governance framework offers a strong and useful model.

"We thank the agencies for their continued engagement on strengthening the supervisory framework and look forward to ongoing dialogue on AI and other key issues."

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About the American Bankers Association

The American Bankers Association is the voice of the nation's $25.3 trillion banking industry, which is composed of small, regional and large banks that together employ over 2 million people, safeguard $20.1 trillion in deposits and extend $13.5 trillion in loans.