ICBA and 44 State Banking Associations Express Concern Over Proposal That May Choke Off Credit to Legal Businesses

Washington, D.C. (June 3, 2022) — The Independent Community Bankers of America (ICBA) and 44 state banking associations, strongly urged the Federal Deposit Insurance Corporation’s (FDIC) not to allow its proposed statement of principles on climate-risk management for large banks to limit and discourage financial institutions from doing otherwise lawful business with climate-disfavored industries.

In the letter ICBA and the state banking groups also cited community bankers' concerns that the potential large bank framework would eventually and inappropriately "trickle down" to small community banks. The letter explains that many small community banks do not have the resources necessary to comply with some of the climate data gathering provisions in the proposed framework.

“Banks should have the ability to lend to any consumer or corporate citizen who is creditworthy and engaged in lawful activity, without fear of political or regulatory retribution,” they said.

ICBA and the 44 state banking groups also suggested the following as the FDIC develops its approach to climate-related financial risk management:

• Conduct studies concerning the impact of climate change on the banking system, while reviewing the FDIC's nearly one hundred years of banking data.
• Gather empirical information to better understand the efficacy of the current risk management framework and practices in managing climate-related financial risk.
• Address any specific gaps in the current framework, and the degree to which climate-related financial risk may or may not threaten the safety and soundness of the financial system.

In addition to the ICBA and state association letter, ICBA sent a separate letter to the FDIC reiterating its concerns that a one-size-fits-all approach to bank regulation is rarely, if ever, appropriate—and climate-related financial risk management is no exception.

ICBA will continue working with policymakers and its network of affiliated state banking groups as part of the ongoing discussion around this important issue. For more information, view ICBA’s policy resolution.

About ICBA

The Independent Community Bankers of America creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.9 trillion in assets, over $4.9trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

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