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119-s-1471119th CongressWALLET

Climate Change Financial Risk Act of 2025

Sponsored By: Senator Schatz, Brian [D-HI]

Introduced

Summary

Would require large banks and certain nonbank financial firms to undergo regular climate-driven stress tests and build capital plans for climate risks. The bill would create federal scenarios, a technical advisory group, public reporting, and give the Federal Reserve conditional authority to object to firms' climate plans and limit capital distributions.

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Bill Overview

Analyzed Economic Effects

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

Which banks and firms are covered

If enacted, the bill would make very large banks and nonbank financial firms subject to extra Fed supervision. Firms with $250 billion or more in total consolidated assets would be automatically covered. Firms with $100 billion or more could be designated covered after a Fed risk-based review. The bill would also treat supervised banks and firms with $10 billion or more in assets that are not covered as surveyed entities for a separate reporting regime.

Climate stress tests, plans, and surveys

If enacted, the Fed would run climate stress tests of each covered entity every two years using the required scenarios to check capital needs. For the first three analyses, covered entities would face no adverse consequences and the Fed must publish summaries and send results to Congress within 60 days. Except for the first analysis, covered entities must submit climate risk resolution plans before later analyses. The Fed can reject plans that fail to show maintenance of minimum capital and can limit capital distributions if it objects. The bill also requires a biennial, anonymized Sub-Systemic Exploratory Survey of surveyed entities (those with $10 billion+ assets that are not covered), with an initial survey and report timing and repeat schedules set in the bill.

Federal Reserve climate scenarios group

If enacted, the bill would require the Federal Reserve to set up a 10-member Climate Risk Scenario Technical Development Group. Five members must be climate scientists and five must be economists, and members would be unpaid. The group would help the Fed develop three climate scenarios within 1 year: 1.5°C, 2.0°C, and a scenario based on implemented national policies. The scenarios must consider many physical and economic risks and be made public.

Sponsors & CoSponsors

Sponsor

Schatz, Brian [D-HI]

HI • D

Cosponsors

  • Sen. Warren, Elizabeth [D-MA]

    MA • D

    Sponsored 4/10/2025

  • Sen. Merkley, Jeff [D-OR]

    OR • D

    Sponsored 4/10/2025

  • Sen. Van Hollen, Chris [D-MD]

    MD • D

    Sponsored 4/10/2025

  • Sen. Whitehouse, Sheldon [D-RI]

    RI • D

    Sponsored 4/10/2025

  • Sen. Murray, Patty [D-WA]

    WA • D

    Sponsored 4/10/2025

  • Sen. Heinrich, Martin [D-NM]

    NM • D

    Sponsored 4/10/2025

  • Sen. Booker, Cory A. [D-NJ]

    NJ • D

    Sponsored 4/10/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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