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Financial Services Law Insights and Observations

OCC, Fed, and Treasury issue statements on climate change

Federal Issues OCC Federal Reserve Biden Climate-Related Financial Risks Department of Treasury Bank Regulatory

Federal Issues

On November 3, the OCC, the Federal Reserve, and the U.S. Treasury Department released statements expressing support for the Network for Greening the Financial System (NGFS) Glasgow Declaration. OCC acting Comptroller Michael J. Hsu noted in a statement that the OCC is developing “high-level climate risk management supervisory expectations for large banks” and expects to issue the framework guidance for comment “by the end of the year.” Hsu also noted that the OCC will implement recommendations of the FSOC Climate Change Report, which was released in response to President Biden’s May executive order, and directed financial regulators to take steps to mitigate climate-related risk related to the financial system (covered by InfoBytes here). In a statement by Treasury Secretary Yellen, she discussed the importance of tackling climate change, stating that it is “the greatest economic opportunity of our time,” and noted the U.S. is “calling on the multilateral development banks to increase their efforts.” The Fed noted in a statement that it is committed to understanding and addressing climate change and, furthermore, “will address climate-related risks in an analytically rigorous, transparent, and collaborative way through our domestic work with other federal agencies including the Financial Stability Oversight Council; our international engagement through the Financial Stability Board, the Basel Committee on Banking Supervision, and the NGFS; and through our broad and transparent engagement with the private sector.”