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119-hr-10746119th CongressWALLET

Fossil Free Finance Act of 2026

Sponsored By: Representative Pressley, Ayanna [D-MA-7]

Introduced

Summary

Align U.S. financial sector emissions with science-based targets. This bill would require large bank holding companies to write and implement emission-reduction plans that cut financed and facilitated emissions, stop new fossil projects, and phase out fossil fuel financing over time.

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  • Covered banks: Bank holding companies with at least $50 billion in assets would need to submit emission-reduction plans to the Federal Reserve within 210 days and at least biennially after that.
  • Targets and limits: Plans must aim for a 50% reduction in financed emissions by 2035 and net zero by 2050. Plans may not rely on carbon offsets and must quickly end new or expanded fossil fuel projects and thermal coal financing.
  • Workers, communities, and regulators: Plans must prioritize worker severance and retraining and limit lending that harms low-income or minority communities. The Financial Stability Oversight Council and the Fed would gain authority to require divestitures and other measures, the FDIC could act on noncompliance, and the Fed must collect data and report progress to Congress.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 0 benefits, 2 costs, 1 mixed.

Penalties and possible loss of deposit insurance

If enacted, the Federal Reserve could penalize a covered bank holding company that fails to submit or meet its emissions plan and require it to sell assets to comply. The Fed would notify the FDIC of noncompliance. After that notice, the FDIC could end deposit insurance for an insured bank controlled by the noncompliant company and use other corrective powers against institutions that contributed to the failure. These enforcement steps apply to financial firms; households could feel effects indirectly through bank operations or deposit-insurance status.

Big banks must file emissions plans

If enacted, bank holding companies with at least $50 billion in assets would have to submit an emissions-reduction plan to the Federal Reserve within 210 days. Plans would pick a baseline within 2 years, cut financed emissions 50% by January 1, 2035, and reach zero by January 1, 2050. Banks would stop financing new or expanded fossil-fuel projects within 60 days, end thermal coal financing immediately, and end all fossil-fuel financing by January 1, 2035. Plans could not use carbon offsets and must prioritize worker transition support and protection for low-income, minority, and Indigenous communities. The Fed would publish plan rules within 180 days and would accept or require revisions within 180 days of each submission.

New oversight for firms' fossil emissions

If enacted, the Financial Stability Oversight Council would consider a company's contribution to financial-sector emissions when deciding which nonbank firms need extra supervision. Prudential standards would be changed to require emissions-reduction plans and to include divestiture of emissions-linked assets. These changes would affect oversight of designated nonbank financial companies and other firms under enhanced prudential supervision.

Sponsors & CoSponsors

Sponsor

Pressley, Ayanna [D-MA-7]

MA • D

Cosponsors

  • Rep. Tlaib, Rashida [D-MI-12]

    MI • D

    Sponsored 10/5/2026

Roll Call Votes

No roll call votes available for this bill.

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