Congress·In Committee·S. 1471

Congress Proposes Climate Stress Tests for Big Banks to Prevent Financial Crashes

Climate Change Financial Risk Act of 2025

12 months ago·View on Congress.gov·Read full text

Part of: Congress Proposes Climate Stress Tests for Major Financial Institutions

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Stalled

No legislative action in over 90 days.

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

Legislative Progress

Senate

House

President

Law

Key Points

This bill requires the Federal Reserve to run 'stress tests' on the nation's biggest banks to see if they can survive financial shocks caused by climate change. This includes physical risks like floods and wildfires, as well as 'transition risks' like the world moving away from fossil fuels and toward renewable energy.
A new group of scientists and economists would create three different scenarios for the future, ranging from mild warming to more extreme temperature rises. Experts would use these scenarios to predict how much money banks might lose if the climate or the economy changes quickly over the next several decades.
Banks with more than $250 billion in assets would have to take these tests every two years. While there are no penalties for the first few rounds, banks would eventually have to create 'resolution plans' to show they have enough cash on hand to handle these specific climate-related risks.
If the Federal Reserve rejects a bank's climate plan, that bank could be blocked from paying out dividends to its shareholders or buying back its own stock. This rule is meant to ensure that banks keep enough money in their vaults to stay stable and keep the economy running during a climate-related crisis.
Smaller banks with at least $10 billion in assets would not face the full tests but would participate in surveys. These surveys help the government understand how prepared the broader banking system is for climate-related disasters or shifts in the energy market without putting too much paperwork on smaller local institutions.

Economy FinanceEnergy Environment

Impact Analysis

Personal Impact

Who is affectedScoreImpactCertaintyScopeDurationSentiment

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

Milestones

2 milestones2 actions

Apr 10, 2025Senate

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Apr 10, 2025

Introduced in Senate

Related Bills

1 bill

H.R. 2823Identical bill

Climate Change Financial Risk Act of 2025

Apr 10 — 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.