To nullify certain interagency guidance related to climate-related financial risk management for large financial institutions.

Bill Number

H.R. 2923

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-04-17: Referred to the House Committee on Financial Services.

Last Updated

2025-05-20T13:18:08Z

AI-Generated Summary

Purpose of the Legislation

H.R. 2923 aims to eliminate the legal and practical influence of a specific 2023 interagency guidance document that outlined how large financial institutions should manage risks related to climate change. The bill seeks to prevent federal banking regulators from enforcing or promoting similar rules in the future.

Key Provisions

• Nullification of Specific Guidance: The bill declares that the document titled "Principles for Climate-Related Financial Risk Management for Large Financial Institutions"—issued on October 24, 2023, by the Board of Governors of the Federal Reserve System (Federal Reserve), the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC)—has no legal force or effect.
• Prohibition on Similar Guidance: These three agencies are barred from issuing any new guidance that is substantially similar to the nullified document.

Significant Changes to Existing Law

• This bill does not amend statutes but directly overrides an existing regulatory guidance, which was non-binding (meaning it was advisory rather than a strict law) but carried significant influence on how banks assess and report climate-related risks, such as those from extreme weather or shifts in energy markets.
• It introduces a congressional check on agency actions, effectively reversing a coordinated effort by regulators to integrate climate considerations into financial oversight without needing new legislation.

Potential Impacts

• On Government Agencies: The Federal Reserve, OCC, and FDIC would lose authority to promote climate risk management in this specific form, potentially limiting their ability to address environmental factors in banking supervision and redirecting focus to other priorities.
• On Citizens: Indirect effects could include reduced emphasis on preparing the financial system for climate-driven economic disruptions, which might influence loan availability, insurance costs, or overall financial stability for individuals and businesses.
• On International Relations: Minimal direct impact, though it could signal a U.S. retreat from global trends where other countries (e.g., in the EU) are advancing climate-integrated financial regulations, potentially affecting cross-border banking coordination.

Main Stakeholders Affected

• Federal Banking Regulators: Primarily the Federal Reserve, OCC, and FDIC, whose supervisory tools are curtailed.
• Large Financial Institutions: Banks and other big entities (e.g., those with over $100 billion in assets) that were expected to follow the guidance for risk assessments and disclosures, now facing less regulatory pressure in this area.
• Environmental and Advocacy Groups: Organizations focused on climate action may see this as a setback to integrating environmental risks into finance.
• Congressional Committees: The House Committee on Financial Services, where the bill was referred, would oversee its implementation.

Notable Legal, Constitutional, or Political Implications

• Legal: As guidance (not a formal rule), nullifying it via legislation is straightforward under Congress's oversight powers, but it highlights tensions between legislative and executive branches in regulating finance. It does not challenge the agencies' broader authority under laws like the Dodd-Frank Act (a 2010 law reforming financial regulation post-2008 crisis).
• Constitutional: Reinforces Congress's role in checking administrative actions, aligning with separation of powers principles, without raising major constitutional concerns.
• Political: The bill reflects debates over the role of climate change in economic policy, potentially polarizing views between those prioritizing deregulation for business and those advocating for proactive environmental safeguards in finance. If passed, it could influence future regulatory agendas under different administrations.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Balderson, Troy [R-OH-12]

Cosponsors (1)

Rep. Pfluger, August [R-TX-11]

Recent Actions

• 2025-04-17: Referred to the House Committee on Financial Services.
• 2025-04-17: Introduced in House
• 2025-04-17: Introduced in House

Bill Versions

• To nullify certain interagency guidance related to climate-related financial risk management for large financial institutions. — issued 2025-04-17 — PDF (2 pages)