Warren and Whitehouse push to restore climate risk rules for major banks
Two Democratic senators have launched an effort to reverse a Trump-era rollback of climate risk guidelines for big banks. Elizabeth Warren and Sheldon Whitehouse are leading the push after federal regulators scrapped 2023 rules designed to address financial risks tied to climate change.
The original guidance, introduced under President Joe Biden, targeted firms with assets exceeding $100 billion. It aimed to create a standard approach for managing climate-related threats in the financial sector.
The climate risk framework was first published in 2023 by three key regulators: the Federal Deposit Insurance Corp. (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC). These agencies sought to ensure large banks understood and prepared for risks linked to extreme weather, carbon transition policies, and other climate factors.
In October 2023, the Trump administration repealed the guidance, arguing it imposed unnecessary burdens on financial institutions. Now, Warren and Whitehouse have introduced S.J. Res.113, a Congressional Review Act resolution to reinstate the rules. The measure would force regulators to revive the 2023 framework if approved by Congress.
Details on how the FDIC, Federal Reserve, and OCC initially applied the guidance remain unclear. Public records do not specify how banks implemented the rules before their removal.
If successful, the resolution would restore mandatory climate risk assessments for major banks. The outcome depends on congressional support and potential opposition from financial industry groups. The move reflects ongoing debate over how regulators should address climate risks in the banking sector.
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