What is SR 11-7?
SR 11-7 was the Federal Reserve's supervisory guidance on model risk management (validation, governance, ongoing monitoring), superseded on April 17, 2026 by the revised interagency guidance issued through SR 26-2 and OCC Bulletin 2026-13.
SR 11-7 in commercial lending practice
Issued in 2011, SR 11-7 set the bar for any quantitative model a bank used in decision-making: prove the model is conceptually sound, validate it independently, subject it to effective challenge from people outside the development team, and monitor it on an ongoing basis. The framework was wide enough that examiners often pulled AI underwriting platforms, vendor scoring models, and spreadsheet-based pricing tools inside the model risk perimeter. On April 17, 2026, SR 26-2 and OCC Bulletin 2026-13 superseded SR 11-7 with revised interagency guidance that narrows the model definition and calibrates governance expectations proportionally for community banks. The disciplines SR 11-7 popularized (validation, monitoring, vendor oversight) still anchor examiner expectations, but citing SR 11-7 as live guidance in 2026 makes a credit file look stale.
Related terms
Related concepts in commercial underwriting
MRA (Matter Requiring Attention)
A finding issued by bank examiners during a regulatory examination that identifies a deficiency requiring corrective action.
Read definitionStress Testing
The process of evaluating a loan's performance under adverse scenarios such as rising interest rates, declining revenues, increased vacancy, or economic recession.
Read definitionConcentration Risk
The risk arising from excessive exposure to a single borrower, industry, geography, or loan type within a lending portfolio.
Read definitionSee it in Aloan
How SR 11-7 shows up in AI underwriting
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