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Congress·In Committee

New Bill Requires Federal Reserve to Test How Climate Change Could Impact Major U.S. Banks

Climate Change Financial Risk Act of 2025

11 months ago·View on Congress.gov

Legislative Progress

✓ Filed
Review
House
Senate
President

Key Points

  • This bill requires the Federal Reserve to study how climate change might hurt the U.S. economy. It focuses on 'stress tests,' which are regular check-ups to see if the nation's biggest banks have enough money to survive major disasters or sudden economic changes.
  • The rules would mainly apply to the country's largest financial institutions—those with over $250 billion in assets. These big banks would have to create 'resolution plans' showing they are prepared for risks like rising sea levels, wildfires, and the global shift toward clean energy.
  • A new group of scientists and economists would be formed to create three different 'what-if' scenarios. These scenarios would help the government predict how different levels of global warming could impact bank loans, property values, and the overall stability of the financial system.
  • Supporters say this is necessary because extreme weather has already cost the U.S. more than $2.9 trillion since 1980. If the largest banks aren't ready for these costs, it could lead to a financial crisis that affects everyone's savings and ability to get loans.
  • If a major bank fails these climate tests or doesn't have a solid plan, the Federal Reserve could limit the bank's ability to pay out money to its shareholders. This is intended to make sure banks keep enough cash on hand to stay safe during environmental or economic emergencies.
Economy FinanceEnergy Environment

Impact Analysis

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions
Apr 10, 2025House

Referred to the Committee on Financial Services, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Apr 10, 2025

Introduced in House

Related News

3 articles
Bloomberg·about 1 year ago

Fed ends climate stress tests for major US banks

The Federal Reserve informed major banks including JPMorgan and Goldman Sachs that they will no longer be required to participate in climate stress tests, discontinuing a pilot program initiated in 2023. This regulatory retreat provides the backdrop for new legislative efforts to codify the tests.

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ABA Banking Journal·about 1 year ago

Fed announces 2025 stress test scenarios

The Federal Reserve released its 2025 stress test scenarios, focusing on a severe global recession and real estate shocks. Notably, the scenarios do not include climate-related variables, highlighting the gap that the Climate Change Financial Risk Act of 2025 seeks to fill through legislation.

CR=
Politico Pro·11 months ago

Dems offer climate risk bill as banks stand by fossil fuels

The reintroduction of the Climate Change Financial Risk Act comes amid intensifying partisan debate. Democrats argue regulators are legally obligated to ensure financial stability against climate-driven crises, while Republicans frame such mandates as 'social engineering' by the government.

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Source Information

Document Type

Congressional Bill

Official Title

Climate Change Financial Risk Act of 2025

Bill NumberHR 2823
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the Committee on Financial Services, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Sponsor

Cosponsors

(10)
D: 10

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.