Overview
On March 31, 2025, the Office of the Comptroller of the Currency (OCC) announced that it would be withdrawing from an interagency rule related to climate-related financial risk.1 This rule was originally released in October 2023 in collaboration with the Federal Deposit Insurance Corporation (FDIC) and the Board of Governors of the Federal Reserve System (FRB).2 In the accompanying press release, Acting Comptroller of the Currency Rodney E. Hood described the principles as "overly burdensome and duplicative" while noting that "existing guidance for banks to maintain a sound risk management framework . . . includes potential exposures to severe weather events or natural disasters."3 The OCC press release did not specify which provisions he considered duplicative. Subsequently, the OCC removed its web page dedicated to climate-related financial risks.
Previously, the "Principles for Climate-Related Financial Risk Management for Large Financial Institutions" (the Principles) provided a high-level framework focusing on six key principles of: (1) governance; (2) policies, procedures, and limits; (3) strategic planning; (4) risk management; (5) data, risk measurement, and reporting; and (6) scenario analysis.4 The Principles further recommend that management "consider and incorporate climate-related financial risks when identifying and mitigating all types of risk" and describe how climate risk plays into several areas, including credit risk, liquidity risk, other financial risk, operational risk, legal and compliance risk, and other nonfinancial risk.5 While interagency guidance is non-binding, the Principles were included in the agencies' supervision process and were intended for institutions with "over $100 billion in total consolidated assets."6
The OCC's withdrawal aligns with the Trump administration's shift away from climate-related regulations. For example, the OCC withdrew from the Network of Central Banks and Supervisors for Greening the Financial System in February of this year, following similar actions by the FDIC and the Department of the Treasury earlier in January.7 Acting Chair Hood commented on the OCC's withdrawal by noting that the regulator's "primary mission is to ensure the safety, soundness, and fairness of national banks and federal savings associations" while "severe weather events . . . do not fall within the OCC's statutory mandate."8 This stance aligns with remarks made by Travis Hill, the then-FDIC Vice Chair, now-FDIC Acting Chair, who stated in January — just 10 days prior to the change in administration — that "the banking agencies' authorities in this area are limited to promoting the safety and soundness of institutions, not to using banks to pursue environmental policy.”9
This movement against climate-related regulation extends beyond bank regulators. For example, the Securities and Exchange Commission (SEC) recently voted to stop the defense of its climate disclosure rules in a suit challenging their validity.10SEC Acting Chair Mark T. Uyeda described the rules as "costly and unnecessarily intrusive."11 Additionally, earlier in March, Lee Zeldin, Administrator of the Environmental Protection Agency (EPA), announced 31 actions, including the reconsideration of certain regulations and restructuring or terminating certain EPA programs.12
While the OCC withdrawal indicates that financial institutions may not currently need to worry about climate risk during OCC examinations, the OCC still "expects banks to have effective risk management processes commensurate with their size, complexity and risk of their activities."13 Nevertheless, the OCC is likely to continue rolling back certain Biden-era rules and guidance, both climate-related and otherwise. Acting Chair Hood has vowed to “continue to look for appropriate opportunities to calibrate regulatory requirements to be effective, not excessive, while ensuring the safety, soundness and fairness of the federal banking system."14 This extends to non-climate-related regulations as well, given the OCC has recently announced it would stop considering reputational risk while examining its financial institutions.15
Steptoe has recently released a blog post covering that OCC action here, and similar actions are likely to follow from the other bank regulators and across the Trump Administration. We will continue to cover these developments as they occur.
1 Press Release: OCC Withdraws Principles for Climate-Related Financial Risk Management for Large Financial Institutions, Office of the Comptroller of the Currency (Mar. 31, 2025), https://www.occ.gov/news-issuances/news-releases/2025/nr-occ-2025-27.html.
2 Risk Management: Risk Management: Principles for Climate-Related Financial Risk Management for Large Financial Institutions, OCC Bulletin 2023-33, Office of the Comptroller of the Currency (Oct. 24, 2023), https://www.occ.gov/news-issuances/bulletins/2023/bulletin-2023-33.html.
3 Supra n.1.
4 Principles for Climate-Related Financial Risk Management for Large Financial Institutions, 88 Fed. Reg. 74,183, 74,187-88 (Oct. 30, 2023).
5 88 Fed. Reg. at 74,188-89 (Oct. 30, 2023).
6 88 Fed. Reg. at 74,183.
7 See Press Release: Acting Comptroller Issues Statement on OCC’s Withdrawal from International Climate Organization (Feb. 11, 2025), https://www.occ.treas.gov/news-issuances/news-releases/2025/nr-occ-2025-10.html; see also Press Release: FDIC Withdraws from the Network of Central Banks and Supervisors for Greening the Financial System, Fed. Deposit Ins. Corp. (Jan. 21, 2025), https://www.fdic.gov/news/press-releases/2025/fdic-withdraws-network-central-banks-and-supervisors-greening-financial; see also Press Release: U.S. Department of the Treasury Withdraws from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), U.S. Dep’t of the Treasury (Jan. 30, 2025), https://home.treasury.gov/news/press-releases/sb0003.
8 Id.
9 Travis Hill, Speech: Charting a New Course: Preliminary Thoughts on FDIC Policy Issues, U.S. Dep’t of the Treasury (Jan. 10, 2025), https://www.fdic.gov/news/speeches/2025/charting-new-course-preliminary-thoughts-fdic-policy-issues.
10 Press Release: SEC Votes to End Defense of Climate Disclosure Rules, Sec. and Exch. Comm’n (Mar. 27, 2025), https://www.sec.gov/newsroom/press-releases/2025-58.
11 Id.
12 Press Release: EPA Launches Biggest Deregulatory Action in U.S. History, Env’t Prot. Agency (Mar. 12, 2025), https://www.epa.gov/newsreleases/epa-launches-biggest-deregulatory-action-us-history.
13 Supra n.1.
14 Id.
15 News Release: OCC Ceases Examinations for Reputation Risk, Office of the Comptroller of the Currency (Mar. 20, 2025), https://www.occ.treas.gov/news-issuances/news-releases/2025/nr-occ-2025-21.html.
