Lucas Joins Financial Services Republicans Asking OCC for Clarity on Potential Climate Supervision Proposal

Cheyenne, OK – Congressman Frank Lucas (OK-03) last week joined House Committee on Financial Services Republicans, led by Ranking Member Patrick McHenry (NC-10), sending a letter to the acting head of the Office of the Comptroller of the Currency (OCC), Michael Hsu. The letter requests the OCC provide clarity on its potential proposal of a climate change related supervision framework for financial institutions.

“Interest regarding the risk of climate change to the financial system and the broader U.S. economy continues to garner attention. Recently you’ve made statements indicating the OCC intends by the end of this year to issue for public comment a framework establishing supervisory expectations for climate risk management for large banks,” wrote the lawmakers.

They continued, “Notwithstanding the OCC’s plans, many financial institutions report they lack necessary data to accurately model climate exposure risk, including in Comprehensive Capital Analysis and Review stress testing or Integrated Assessment Models. We are interested in better understanding how the OCC intends to implement such a framework and the supervisory consequences for banks that would ensue.

“According to climate experts, deep uncertainty exists with respect to the precise geographic and ecological effects of climate change. The economic implications of climate-related geographic and ecological changes are subject to even more uncertainty. Given the substantial uncertainty that exists in this space, it is unclear what criteria the OCC intends to use to forecast climate risk within a financial institution’s portfolio and operations.”

Read the full letter here or below:

 

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