SR 21-8:
Interagency Statement on Model Risk Management for Bank Systems Supporting Bank Secrecy Act/Anti-Money Laundering Compliance
OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF
SUPERVISION AND REGULATION
April 9, 2021
TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK
Interagency Statement on Model Risk Management for Bank Systems Supporting Bank Secrecy Act/Anti-Money Laundering Compliance
Applicability: This guidance applies to all financial institutions supervised by the Federal Reserve that are subject to the Bank Secrecy Act.
The Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), are issuing this joint statement to address how the risk management principles described in the “Supervisory Guidance on Model Risk Management” (referred to as the “model risk management guidance”) relate to systems or models used by banks to assist in complying with the requirements of Bank Secrecy Act/anti-money laundering (BSA/AML) laws and regulations. The model risk management guidance was issued by the Board, FDIC and OCC (Federal Reserve SR Letter 11-7; OCC Bulletin 2011-12; and FDIC FIL 22-2017).1
The joint statement is being issued in consultation with the Financial Crimes Enforcement Network (FinCEN) and the National Credit Union Administration (NCUA). The joint statement clarifies that the risk management principles discussed in the model risk management guidance may be appropriate considerations in the context of the BSA/AML statutory and regulatory requirements but do not require any specific model risk management framework or application. The statement also explains that the model risk management guidance may be a useful resource for a bank’s model risk management framework and to assist with BSA/AML compliance.
Reserve Banks are asked to distribute this letter to the supervised institutions in their districts and to appropriate supervisory staff. Questions regarding this letter may be sent via the Board’s public website.2
signed by
Michael S. Gibson
Director
Division of
Supervision and Regulation
Notes:
- This interagency statement is released in conjunction with a Federal Register notice on RFI model risk management, see https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20210409a1.pdf. Return to text.
- See, http://www.federalreserve.gov/apps/contactus/feedback.aspx. Return to text.