Climate regulation a 'compelling obligation' for FDIC’s acting chairman

It is clear the push for climate regulation will continue following remarks from Acting FDIC Chairman Martin Gruenberg during the American Bankers Association General Session. He began his prepared remarks by stating, "the FDIC is not responsible for climate policy," and "will not be involved in determining which firms or sectors financial institutions should do business with."

Gruenberg then spent most of his remarks discussing the basis for the promulgation of climate risk proposals by federal regulators who he said have "a compelling obligation to engage with climate change as a financial risk to the safety and soundness of banks and the stability of the financial system." Gruenberg said there is an intention to "tailor" climate regulation by institution size as well as by complexity of operations and business models. He closed by saying, "we are in the beginning," and will "emphasize risk-based assessments and collaboration with other supervisors and industry, and, our actions will complement the actions taken domestically and internationally." This issue is far from settled. TBA will continue to advocate for regulators to focus on traditional safety and soundness and not to exceed their statutory authorities.