The National Credit Union Administration (“NCUA”) has requested comment (the “RFI”) on how climate and natural disaster risks may affect federally insured credit unions, their members, and the National Credit Union Share Insurance Fund. The RFI indicates that the NCUA may use the results of the RFI to develop regulatory and
On April 7, 2023, the Federal Reserve Bank of New York released two staff reports on climate-related risks for financial institutions. While the staff reports do not suggest or impose legal requirements, they provide financial institutions with insights on banking regulators’ positions on climate-related risk management requirements and current industry practices. In this Legal Update
On January 17, 2023, the Board of Governors of the Federal Reserve System (“Federal Reserve”) launched its pilot climate scenario analysis exercise (“CSA”) by publishing instructions for the six US banking organizations that will participate.
As part of the CSA, participating organizations will submit data templates, supporting documentation, and responses to qualitative questions to the
In January 2023, the Board of Governors of the Federal Reserve System released a report that reviews the climate action plans of global systemically important banks (“G-SIBs”) and summarizes the progress they are making toward achieving them (“Climate Action Report”).[1] As discussed below, the Climate Action Report can be an useful tool for banks that are developing sustainable financing products and climate risk management processes because it identifies key peer behaviors and widely used resources.
On December 8, 2022, the Basel Committee on Banking Supervision (“BCBS”) released guidance to clarify how climate-related financial risks may be captured in existing capital and liquidity requirements for banking organizations (“Climate FAQs”). The Climate FAQs are noteworthy because they indicate that standard setters believe climate-related financial risks should be included in bank capital requirements
Banking organizations should take note of an announcement last week by the Board of Governors of the Federal Reserve System that it would conduct a climate scenario analysis exercise with six of the largest US banking organizations. This Legal Update provides further detail on this exercise.
Continue reading at mayerbrown.com.
On June 23, 2022, the American Bankers Association and 51 state bankers associations released a letter to the federal financial regulators that describes principles the regulators should use when developing guidance and regulations on ESG issues (“Industry Letter”). These principles reflect the industry’s view on how the government can maintain a free-market financial system that also
On June 2, 2022, the US Commodity Futures Trading Commission (“CFTC”) released a request for information on how climate-related financial risk is related to the derivatives markets and underlying commodities markets (the “RFI”). The RFI is intended to inform the CFTC’s next steps in this rapidly developing area and respond to the 2021 Report on Climate-Related
On March 21, 2022, the U.S. Securities and Exchange Commission (SEC) voted 3:1, with only Commissioner Hester Peirce dissenting, to propose long-awaited rules that, if adopted, would require extensive reporting by public companies of climate change-related disclosure and related attestation (the “Proposal”). Comments on the Proposal are due 30 days after
On December 16, 2021, the US Office of the Comptroller of the Currency (OCC) released draft principles for managing exposures to climate-related financial risks (Climate Principles). The OCC regulates national banks, federal savings associations, and federal branches and agencies of foreign banking organizations.
The Climate Principles are targeted at banks with