OCC Withdraws from Interagency Guidance on Climate Risk

The Office of the Comptroller of the Currency will no longer follow interagency guidance on climate-related risk management for large financial institutions.

On October 23, 2023, the OCC, FDIC and Federal Reserve Board issued joint guidance that provided a high-level framework for the safe and sound management of "exposures to climate-related financial risks" principles. (See previous coverage.) The joint principles required financial institutions to integrate climate-related financial risk consideration into governance, policies, strategic planning, risk management, data and reporting and scenario analysis. 

Acting Comptroller of the Currency Rodney E. Hood said the joint guidance was "overly burdensome and duplicative" of existing guidance which requires banks to maintain a sound risk management framework including as to "potential exposures to severe weather events or natural disasters.”  He said that the agency would "continue to look for appropriate opportunities to calibrate regulatory requirements to be effective, not excessive," while ensuring the integrity of the federal banking system.