Federal Banking Regulator Abandons Guidance for Climate Financial Risks

“Today the Office of the Comptroller of the Currency (OCC), one of three agencies that are the backbone of U.S. federal banking regulation and that helped develop joint guidance for banks on managing climate-driven financial risks, announced that it will no longer use that guidance. This is a big step in the wrong direction for our country’s financial health. 

“Climate-related financial risks — including damages from more dangerous fires, storms and floods — are already burdensome and are increasing. That’s why the OCC, the Federal Deposit Insurance Corporation and the Federal Reserve Board issued guidance for banks in 2023, and why Federal Reserve Chair Jerome Powell stated earlier this year that parts of the U.S. will lose access to mortgages and other financial services in the next decade if these risks are not effectively managed. The OCC’s decision today to withdraw from the joint guidance will make it more difficult for banks and the regulators that supervise them to effectively manage these growing risks and will hurt consumers who are already bearing high costs from climate change.”

• Stephanie Jones, Senior Attorney, Environmental Defense Fund.