Congress moves to blind banks to climate risks in their portfolios
H.R. 2923 — To nullify certain interagency guidance related to climate-related financial risk management for large financial institutions. · Filed by Troy Balderson (R-OH) · 1 cosponsor · Introduced Apr 17, 2025 · Referred to committee
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What it does
This bill voids federal guidance issued by banking regulators (the Federal Reserve, the Comptroller of the Currency, and the FDIC) that required large financial institutions to assess and manage climate-related financial risks. It also prohibits these agencies from issuing substantially similar guidance in the future. The bill benefits large banks by removing a regulatory expectation to evaluate climate risks to their portfolios.
Why we flagged it
The bill's sole function is to void regulatory guidance requiring large banks to assess climate-related financial risks and to prohibit similar guidance in the future. It is a deregulatory measure that reduces transparency and risk-management expectations for large financial institutions.
What the text implies
- Voiding the guidance removes a transparency mechanism that allowed regulators and the public to assess whether large banks are exposed to climate-driven losses. Without it, climate risks to bank portfolios remain opaque.
- The prohibition on 'substantially similar guidance' may prevent regulators from issuing updated or revised climate-risk frameworks, even if financial conditions or climate science change.
The full analysis lists 4 implications of this text.
Who stands to gain
Large commercial banks; Large financial institutions subject to the voided guidance; Fossil-fuel and carbon-intensive industries (reduced pressure on banks to divest or reduce exposure)