To nullify certain interagency guidance related to climate-related financial risk management for large financial institutions.
If enacted, HB 10120 could significantly impact how large financial institutions in the state approach climate-related risks. Specifically, it would prevent these institutions from adhering to guidelines that mandate the assessment of potential financial impacts stemming from climate change and environmentally focused regulations. Supporters argue that this move will enhance the ability of these institutions to operate without added bureaucratic constraints, thereby potentially increasing their flexibility and profitability.
House Bill 10120 aims to nullify certain interagency guidance related to climate-related financial risk management for large financial institutions. This guidance was issued by the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation on October 24, 2023. By nullifying this guidance, the bill seeks to eliminate requirements that financial institutions consider climate-related risks when managing their financial strategies and compliance assessments. Proponents of the bill argue that such regulations are an overreach and may impose undue burdens on financial institutions.
Opponents of HB 10120 argue that nullifying the guidance can lead to a lack of accountability for financial institutions regarding environmental risks, which could ultimately lead to greater financial instability in the sector. They contend that integrating climate-related risks into financial management is essential for protecting investors and maintaining systemic stability. As the discussions around the bill progress, expect ongoing debates regarding the balance between regulatory oversight and the autonomy of financial institutions.