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FDIC Issues Draft Climate Guidance for Large Banks

April 4, 2022

On March 30, the Federal Deposit Insurance Corporation (FDIC) released a draft policy statement outlining high-level climate risk management principles for large banks. Comments are due June 3, 2022. Pointing to both physical and transition risk, the FDIC requests feedback on principles related to governance, policies and procedures, strategic planning, risk management, data and risk measurement, and scenario analysis.

FDIC Guidance Follows Similar Action by OCC

The publication of this draft policy statement follows action taken in December 2021 by the Office of the Comptroller of the Currency (OCC), which published very similar climate-related preliminary guidance for banks with over $100 billion in total consolidated assets.

According to the OCC:

These draft principles provide a high-level framework for the safe and sound management of exposures to climate-related financial risks, consistent with the existing risk management framework described in existing OCC rules and guidance.

The Federal Reserve is also laser-focused on climate risk, with senior officials, including Federal Reserve Governor and nominee for Vice-Chair of Supervision Lael Brainard, stressing the importance of scenario analyses.

Climate risk has been at the forefront of the Biden Administration’s agenda with several key climate-related executive orders and commitments. The Administration will likely continue to advance the issue via executive orders and regulatory mandates. CREFC continues to closely monitor both regulatory and legislative developments related to climate risk, particularly as they relate to commercial real estate markets.

Contact 

Sairah Burki
Managing Director, Regulatory Affairs
703.201.4294
sburki@crefc.org
The Federal Reserve is also laser-focused on climate risk, with senior officials, including Federal Reserve Governor and nominee for Vice-Chair of Supervision Lael Brainard, stressing the importance of scenario analyses.
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2022 CRE Finance Council. All rights reserved.

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