NEW US Treasury releases AI Risk Management Framework — 230 control objectives for financial institutions

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AI Governance
February 26, 2026 · 3 min read

The US Treasury Just Gave Financial Institutions an AI Governance Checklist

On February 20, 2026, the US Department of the Treasury released its Financial Services Sector AI Risk Management Framework — the most comprehensive federal guidance to date on how financial institutions should govern artificial intelligence. This isn't a set of principles. It's a framework with 230 specific control objectives across ten governance domains.

230
Control Objectives
10
Governance Domains
Feb 2026
Released

The framework aligns with the NIST AI Risk Management Framework but translates it specifically for financial services — covering model risk management, data governance, third-party AI oversight, human oversight, bias testing, incident response, and Board-level reporting. Critically, it doesn't distinguish between institutions that build their own AI models and those using vendor-provided tools. If your employees are using AI in any form, the governance expectation applies.

The fundamental question for every board: Do you have a complete inventory of what AI tools your people are using — and a governance framework around that usage? For most mid-market institutions, the honest answer is no. That gap is now visible to examiners.

This framework arrives alongside the EU AI Act's high-risk provisions (effective August 2026), updated OCC guidance on model risk management, and the CFPB's increased focus on AI in fair lending. Together, these create a regulatory environment where AI governance has moved from optional to supervisory expectation. Institutions going through mergers or technology transformations face an additional layer: harmonizing AI governance across combined organizations without creating blind spots.

What to do now: Conduct an AI inventory across the institution. Establish a tiered risk classification framework. Build a governance structure that maps to the Treasury framework's ten domains. The institutions that move now will have a defensible position when examiners ask. Those that wait will be building under pressure — which is always more expensive.

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