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CSBS releases Artificial Intelligence Supervisory Framework
Sep 30,26 | 01:35 EST
On September 16, 2026, the Conference of State Bank Supervisors ("CSBS") released an Artificial Intelligence Supervisory Framework ("Framework") designed to help state financial regulators and financial institutions identify how institutions use artificial intelligence ("AI") and assess and manage associated risks. Although the Framework does not impose any new legal requirements, it serves as a critical tool that many state regulators are likely to integrate into their supervisory programs. Financial institutions are encouraged to utilize this Framework to evaluate their existing AI use, establish robust AI governance, and implement effective risk management strategies. This initiative addresses the rapid expansion of AI, including generative and agentic AI, across the financial sector by providing a consistent and risk-based methodology for supervision. It draws upon established risk management principles from various public resources, such as the National Institute of Standards and Technology's AI Risk Management Framework, the Cyber Risk Institute's Financial Services AI Risk Management Framework, and the US Department of Treasury's AI Lexicon. The Framework's broad applicability to state-chartered banks and state-licensed nonbank financial institutions, which constitute a significant majority of US banks, indicates its considerable practical reach and potential to influence broader regulatory standards. It also offers specific guidance through components like the Core Examiner Guide, Examiner Work Program, and Nonbank AI Supplements, which detail considerations for third-party and vendor risk, model risk, and consumer protection in AI applications. The introduction of this Framework highlights the evolving regulatory landscape for AI in finance, anticipating further guidance from federal banking regulators and urging institutions to proactive assess and manage their AI-related risks.
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