Sponsors (8)
The bill uses standardized, science-led scenarios, stress tests, and reporting to strengthen the financial system against climate risks and reduce taxpayer exposure to failures, but it creates new compliance and administrative costs, regulatory uncertainty, and distributional risks that may raise borrowing costs and harm vulnerable workers and communities.
Taxpayers, depositors, and consumers will face a lower risk of bank failures and taxpayer-funded bailouts because banks and large financial firms must assess climate risks, hold more capital through stress tests, and prepare climate risk resolution plans.
Households, small businesses, and communities will experience less economic disruption because standardized scenarios, biennial surveys, and ongoing monitoring improve early detection of climate-driven financial vulnerabilities and encourage earlier adaptation.
Financial regulators, state governments, and firms will get higher-quality, science-informed technical coordination because the bill establishes climate science leads, an interagency technical advisory structure, and coordinated scenario development.
Middle-class families, small businesses, and taxpayers may face higher costs and reduced credit availability because banks and regulated firms will incur new compliance, modeling, and reporting costs that are likely to be passed to customers.
Federal agencies, taxpayers, and supervised firms could see slower or diverted supervisory work because implementing new climate workstreams, advisory groups, publications, and stress-test programs will require administrative resources and ongoing costs.
Rural and low-income communities could be disadvantaged in how supervisory attention and resources are allocated if scenario assumptions or available data understate local vulnerabilities.
Based on analysis of 7 sections of legislative text.
Requires the Federal Reserve to build climate risk scenarios, form a technical group, run biennial climate stress tests of very large financial firms, and survey large supervised banks about exposures and adaptation plans.
Introduced April 10, 2025 by Brian Emanuel Schatz · Last progress April 10, 2025
Requires the Federal Reserve to develop standardized climate-change risk scenarios (including 1.5°C and 2.0°C pathways and a policy-based scenario), form a 10-member technical group of climate scientists and economists to support scenario design, and run biennial climate-related stress tests of the largest bank holding companies and designated large nonbank financial companies to assess capital adequacy under those scenarios. The Fed must also survey large supervised banks about exposures concentrated in climate-exposed geographies or industries and publish public summaries and plausibility analyses of survey results.