Addressing Climate Financial Risk Act of 2021
This bill establishes the Climate Risk Advisory Committee that must consult with the Financial Stability Oversight Council of the Department of the Treasury regarding a report on the impact of climate risk on U.S. financial stability.
Additionally, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration must include climate risk in the guidance provided to a supervised financial institution.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1549 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 1549
To establish the Advisory Committee on Climate Risk on the Financial
Stability Oversight Council.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 3, 2021
Mr. Casten (for himself, Ms. Castor of Florida, Ms. Velazquez, Mr.
Cleaver, Mr. Levin of California, and Ms. Norton) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To establish the Advisory Committee on Climate Risk on the Financial
Stability Oversight Council.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Addressing Climate Financial Risk
Act of 2021''.
SEC. 2. ADVISORY COMMITTEE ON CLIMATE RISK.
(a) In General.--Subtitle A of the Financial Stability Act of 2010
(12 U.S.C. 5321 et seq.) is amended by inserting after section 121 (12
U.S.C. 5331) the following:
``SEC. 121A. ADVISORY COMMITTEE ON CLIMATE RISK.
``(a) Establishment.--There is established in the Council the
Climate Risk Advisory Committee, which shall--
``(1) consult with the Council in the drafting by the
Council of an annual report on climate risk required under
subsection (e) and other climate risk matters; and
``(2) meet with the Council not less frequently than once
per year.
``(b) Membership.--
``(1) In general.--The Committee shall consist of the
following members:
``(A) Four members who are climate science experts,
of whom--
``(i) 1 shall be appointed by the Secretary
of Energy;
``(ii) 1 shall be appointed by the
Administrator of the Environmental Protection
Agency; and
``(iii) 2 shall be appointed by the
Director of the National Science Foundation.
``(B) Eight members who are experts in climate
economics or climate financial risk appointed by the
Council, of whom not fewer than 1 member is each an
expert in--
``(i) insurance;
``(ii) capital markets;
``(iii) banking;
``(iv) international financial markets;
``(v) housing; and
``(vi) the perspective of asset owners.
``(2) Prohibition.--No member of the Committee may be
employed by a company within the jurisdiction of a member
agency of the Council.
``(c) Term.--The members of the Committee shall be appointed for 3-
year terms, except that the initial terms of the first members of the
Committee shall be staggered so that--
``(1) 4 members serve terms of 3 years;
``(2) 4 members serve terms of 2 years; and
``(3) 4 members serve terms of 1 years.
``(d) Consultation.--The Council shall consult with the Committee
in carrying out the requirements of this section.
``(e) Report on Climate Financial Risk.--Not later than 270 days
after the date of enactment of this section, the Council shall, in
coordination with the Committee and the Deputies Committee of the
Council, publish a report that--
``(1) assesses--
``(A) the potential impact of climate risk on the
financial stability of the United States;
``(B) the extent to which Federal and State
financial regulatory agencies have sufficient expertise
on climate risk;
``(C) the quality of data available to Council
members to properly assess climate financial risk and
any gaps in data that exist;
``(D) the extent to which supervised financial
institutions are engaging in sound climate risk
management;
``(E) the degree of coordination among Federal and
State financial regulatory agencies on climate risk;
``(F) the degree of coordination by Federal and
State financial regulatory agencies with international
financial regulatory authorities on climate financial
risk;
``(G) how U.S. climate financial risk disclosure
requirements compare to climate financial risk
disclosure regimes in other countries and to other
regimes that are available; and
``(H) any other areas the Council believes are
important; and
``(2) provides recommendations based on the assessments in
paragraph (1) to Federal and State financial regulatory
agencies and to Congress on how to improve the ability of the
financial regulatory system in the United States to identify
and mitigate climate financial risk.
``(f) Member Agencies.--Each member agency should develop and make
publicly available a strategy to identify and mitigate climate
financial risk within the jurisdiction of the member agency.
``(g) Coordination.--The Council should--
``(1) facilitate the sharing of best practices on climate
financial risk across agencies; and
``(2) assign the Office of Financial Research to conduct
ongoing research into climate financial risk.
``(h) Inclusion in Annual Report.--The Council shall include a
section on climate financial risk in--
``(1) the annual report of the Council to Congress; and
``(2) if relevant, in any other report to Congress.''.
(b) Technical and Conforming Amendment.--The table of contents of
the Dodd-Frank Wall Street Reform and Consumer Protection Act in
section 1(b) of that Act is amended by inserting after the item
relating to section 121 the following:
``Sec. 121A. Advisory Committee on Climate Risk.''.
SEC. 3. UPDATE ON SUPERVISORY GUIDANCE ON CLIMATE RISK.
(a) Definition.--In this section, the term ``Federal banking
agency'' has the meaning given the term in section 2 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301).
(b) Update.--Each Federal banking agency and the National Credit
Union Administration shall update applicable supervisory guidance to
include climate risk, including credit, liquidity, market, operational,
and reputational risk to ensure that supervised financial institutions
appropriately identify and mitigate climate financial risk.
(c) Coordination.--The Federal Financial Institutions Examination
Council shall ensure that the guidance updated under subsection (b)
is--
(1) appropriately coordinated among the Federal banking
agencies and the National Credit Union Administration; and
(2) shared with State regulators.
SEC. 4. UPDATE NONBANK SIFI DESIGNATION GUIDANCE.
The Financial Stability Oversight Council shall update subpart B of
part 1310 of title 12, Code of Federal Regulations, to specify how the
Council will incorporate climate risk into determinations described in
that subpart.
SEC. 5. FIO REPORT ON INSURANCE REGULATION AND CLIMATE RISK.
Not later than 1 year after the date of enactment of this Act, the
Federal Insurance Office shall publish a report that--
(1) assesses the potential impact of climate financial risk
on the insurance sector in the United States; and
(2) recommends ways to modernize and improve the system of
climate risk insurance regulation in the United States.
SEC. 6. IMPROVE GLOBAL COORDINATION.
It is the sense of Congress that relevant Federal financial
regulatory agencies and the Department of the Treasury, if relevant,
should--
(1) join the Network for Greening the Financial System and
other international organizations focused on climate financial
risk;
(2) formally join the Task Force on Climate-Related
Financial Risks of the Basel Committee on Banking Supervision;
and
(3) work with international regulators on climate financial
risk whenever possible, consistent with United States law.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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