Every AI Regulation That Hits Banks, Lenders, and Insurers in 2026

Banks have had model risk management requirements since 2011. SR 11-7. Eighteen pages from the Fed and OCC that defined how every bank should govern quantitative models. They already had this figured out fifteen years ago. Then every bank started deploying neural networks and gradient boosted trees without updating their MRM programs to match. Now CFPB, SEC, OCC, FINRA, NAIC, and their EU and UK counterparts are all reinterpreting existing authority to cover AI. No new federal law needed. The rules were already there. Banks just stopped following them. SR 11-7 Is Still the Foundation If you work in financial services and haven't read it, stop and read it. Three pillars: development and implementation, validation, governance. It defines a "model" as any quantitative method that processes input data into quantitative estimates. That definition covered every ML model at every bank since 2011. Institutions that treated SR 11-7 as only for logistic regressions and scorecard models are now realizing their ML systems should have been under MRM governance all along. What most AI teams aren't doing: independent model validation before production.