DECISION: [ADR-008] SR 11-7 as Control Superset
DATE: 2026-02-18
TYPE: 1 (irreversible)
STATUS: Accepted
SOLITON SCORE: 0.88

## Context

Orxaq builds causal models for credit risk. Multiple regulatory frameworks
apply: SR 11-7 (Fed model risk management), OCC 2011-12 (model risk guidance),
CECL (ASC 326), CCAR/DFAST stress testing, fair lending (ECOA/Reg B).

Implementing controls for each framework independently creates redundancy
and gaps. A superset approach ensures all frameworks are covered by a single
control structure.

## Options Considered

### Option A: Framework-Specific Controls
Pros: Each regulation gets tailored controls.
Cons: Redundant controls, gap risk between frameworks, maintenance burden.

### Option B: Minimum Viable Compliance
Pros: Fastest to implement, lowest overhead.
Cons: Gaps discovered during examination are costly; remediation under
examiner scrutiny is high-pressure and expensive.

### Option C: SR 11-7 as Superset (selected)
Pros: SR 11-7 is the most comprehensive model risk framework. Its requirements
are a superset of OCC 2011-12 and cover the model governance aspects of CECL
and CCAR. Fair lending controls extend (not conflict with) SR 11-7.
Cons: Higher initial compliance overhead than minimum viable.

## Decision

Adopt SR 11-7 as the control superset. All modeling decisions governed by
SR 11-7 requirements:

1. **Model Identification**: Every causal model registered in audit log
2. **Model Development**: ADRs document methodology choices
3. **Model Validation**: Independent testing (test suite = initial validation)
4. **Model Use**: Audit log tracks every model invocation
5. **Model Governance**: Hash-chained audit log, immutable decision trail

Implementation from day one:
- Hash-chained audit log (AuditLog class) for model governance
- Entity sensitivity levels (PUBLIC through RESTRICTED) for data classification
- Regulatory tags on entities and dimensions for examination traceability

## Rationale

Examiners start with SR 11-7. If our controls satisfy SR 11-7, they satisfy
OCC 2011-12 by definition. CECL and CCAR add domain-specific requirements
(loss estimation methodology, stress scenario design) that extend SR 11-7
controls rather than conflicting with them.

Building the audit log from day one means every operation is traceable from
the first commit. Retroactive audit logging is unreliable (ADR-006).

## Consequences

**Easier:** Single control framework to maintain; examiner-ready from day one.
**Harder:** Hash-chained logging adds ~5% overhead to every operation.
