Sponsors (8)
Introduced April 10, 2025 by Brian Emanuel Schatz · Last progress April 10, 2025
The bill strengthens detection, monitoring, and transparency of climate risks to the U.S. financial system—reducing systemic risk and improving planning for governments and infrastructure—but does so by imposing new reporting, testing, and capital expectations that will raise compliance costs, may be passed to consumers, create uneven effects across firms and communities, and raise governance and politicization concerns.
Taxpayers and middle‑class families face lower risk of bank failures and systemic shocks because regulators will identify climate-related losses and push firms to hold stronger capital buffers.
Financial institutions, investors, and markets gain standardized, science‑based climate scenarios and data that improve transparency and enable better risk assessment and pricing of climate exposures.
State and local governments, utilities, and communities get publicly available scenario outputs and data to plan adaptation, improving infrastructure resilience and emergency planning.
Covered banks and large financial firms will incur higher compliance, analytic, and capital costs that are likely to be passed along as higher fees, reduced lending, or increased borrowing costs for consumers and businesses.
Linking climate reporting to financial‑stability statutes and giving agencies discretion over scientific inputs could politicize oversight, expand supervisory reach, and invite disputes over which science informs regulation.
Emphasizing climate scenarios and transition risks may accelerate disinvestment from fossil‑fuel sectors and harm workers, communities, and local economies tied to those industries.
Based on analysis of 7 sections of legislative text.
Requires the Federal Reserve to build standardized climate-change risk scenarios, assemble a technical group of climate scientists and economists, and use those scenarios to run recurring climate-focused capital adequacy tests for the largest bank holding companies and nonbank financial companies. It also creates recurring surveys of covered banking entities to evaluate geographic and sector concentrations, publicly reports aggregated findings, and requires public technical guidance and resources to help firms assess physical and transition risks.