CECL model validation
Adversarial by design: the trust layer behind our CECL validation
FinLucidity is testing an evidence-based workflow for reviewing methods, data, assumptions, calculations, and governance, with documented findings and human review before broader availability.
Engagements are scoped by institution size and model complexity.
One rule, enforced in code
The system challenges and recalculates — it never fabricates a finding, a number, or a citation.
This is not a guideline the AI is merely asked to follow. Seven independent software gates stand between the analysis and anything a client reads.
Mechanical controls
The seven gates
| Gate | What it enforces |
|---|---|
| 1Number provenance | Every tested figure must originate from a deterministic recalculation ledger. Numbers flow into the report from verified computations. |
| 2Evidence-backed findings | A finding without a documented evidence reference is structurally suppressed, and every suppression is logged. |
| 3Citation verification | Every regulatory citation is checked against a verified library. An invented citation fails the report. |
| 4Recalculation transparency | Recalculations show the bank’s figure and ours, together with the formula and inputs. Neither figure is silently adopted. |
| 5Calibrated conclusions | Conclusions use a fixed taxonomy. Mechanically blocked language prevents overstatement such as “certified” or a standalone “Validated.” |
| 6Independence structure | Required limitations statements and a preserved management-response record keep accepted, modified, and rejected findings visible. |
| 7Evidence is data, not instructions | Client documents are quarantined as data. Text inside an uploaded file cannot alter a procedure, guardrail, or conclusion. |
Effective challenge · August 2026
Then we challenged it
The gate layer went through iterative challenge review. Fresh, unscripted probes attempted to pass fabricated citations, unsupported findings, overstated conclusions, and hidden instructions through each control. Every correction was challenged again with a new set of probes.
3
challenge rounds with freshly written probes
39
novel probes beyond 90 scripted checks
3
evasion paths found in review and closed
0
findings in the final round
Our shipping standard: a fix list going green is not a pass. The gate layer clears only when a fresh round of challenge probes, written against the fixed build, comes back clean.
Evidence boundary
The same discipline applies to your data
The workflow runs aggregate-first — no borrower personal information. Evidence arrives through an encrypted, time-boxed upload channel and is screened before any analysis step opens it. Client evidence remains separate from the public-data platform and raw evidence is deleted at engagement close.
Engagement output
What a bank receives
- Validation report with a calibrated conclusion level
- Findings register with supporting evidence
- Management-response record
- Evidence inventory
- Workpaper index
Talk to us about a validation
We’ll discuss the institution, model complexity, evidence boundaries, and the scope appropriate for the engagement.
Request a CECL validation conversationPrefer to talk? Call (706) 600-6431 or email hart@finlucidity.com.