In remarks Monday at the OCC, Acting Comptroller Michael Hsu indicated that the agency plans to address climate change risk regulation with high-level framework guidance and five “range of practices” questions for large-bank boards by the end of 2021.
The questions are intended to spur conversations at the board level with management and to inform more detailed guidance that would likely be developed in 2022. Examinations based upon the guidance will follow after the more detailed guidance in 2022, and a focus on climate risk and midsize and smaller banks will follow after that, he said.
Hsu committed to taking a deliberate, phased and data-driven approach to understanding the financial risks and opportunities posed by climate change and the transition to a lower-carbon economy. He also noted that each bank is unique with different customers and business lines and that it is important to ensure that any consideration of climate risk as a supervisory issue is appropriate and tailored, based on the size, complexity and location of the institution. Read the speech. For more information, contact ABA’s Joe Pigg.