FOR IMMEDIATE RELEASE: October 20, 2025
CONTACT: Jarice Thompson, jarice@ourfinancialsecurity.org
Regulators Cave to Banking Industry and Climate Deniers and Rescind Critical Evaluation of Climate Financial Risks
WASHINGTON, D.C. – Last week, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (the “banking regulators”) rescinded the Principles for Climate-Related Financial Risk Management for Large Financial Institutions. The 2023 climate financial risk principles for large banks with over $100 billion included engaging with banks and bank examiners to identify climate-related vulnerabilities and prevent bank failures that would endanger depositors, customers, and the U.S. economy.
Federal Reserve Governor Barr appropriately dissented on the rescission and Governor Cook emphasized that she expected large banks to continue to monitor and address those material climate risks.
“The bank regulators have chosen to ignore the growing and substantial climate financial risks to communities, customers, and the economy,” said Jessica Garcia, senior policy analyst for Climate Finance at Americans for Financial Reform Education Fund.
The Federal Reserve Board memo justifying the rescission states that the principles “may be distracting large financial institutions from the management of material financial risks,” which implies that the bank regulators do not believe that climate-related financial risks are material, which is at complete odds with the scientific reality of climate change and the known resulting economic impacts from increasingly severe and frequent climate-related disasters. In 2024, the United States had 27 confirmed $1 billion loss weather and climate disaster events, well above the 9 annual $1 billion loss climate events between 1980 and 2024.
“Federal banking regulators have caved to political pressure and are ignoring common sense and the scientific reality of climate change which will leave us less prepared for future disasters,” added Garcia. “These principles were a resource — not regulatory red tape — that would have continued to help banks and regulators prepare for the economic fallout of climate driven disasters and chronic conditions such as higher average temperatures, sea-level rise, and droughts.”
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