WASHINGTON— Congresswoman Erin Houchin (R-IN) introduced a resolution to halt the implementation of the Federal Deposit Insurance Corporation’s (FDIC) recent climate rule. Under a Congressional Review Act, the resolution pushes back against the Biden Administration’s climate-obsessed agenda, which undermines proper risk management within the banking sector.
This climate rule, issued concurrently by the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), and the FDIC, comes on the heels of the collapse of Silicon Valley Bank and Signature Bank. Under the Biden Administration’s direction, this rule requires banks to account for customers’ climate risks and other Environmental, Social, and Governance (ESG) factors when determining who to bank, offer loans to, and ultimately do business with.
It has drawn criticism for diverting attention away from sound banking practices. Instead of safeguarding the banking system, the rule would increase bank burdens and compliance costs, ultimately passing these costs on to consumers.
Issued on October 24, 2023, the rule’s guidance applies to banks with $100 billion or more consolidated assets. It emphasizes a risk-based approach tailored to each covered bank’s business model and operations.
“In this environment of high inflation and energy costs, the last thing we need from this Administration is more red tape and more attacks on American energy producers,” said Congresswoman Houchin. “The FDIC is not a climate regulator. This resolution aims to refocus its attention on the safety and soundness of our banking sector rather than pursuing an ideologically driven climate agenda.”
Congresswoman Houchin’s resolution seeks to nullify this burdensome rule, redirecting regulatory attention to the fundamental concerns of risk management and financial stability within the banking industry.
