ICBA commends SEC for ending defense of climate-related disclosure rule

ICBA commended the SEC for ending the defense of its rule requiring public companies to issue climate-related disclosures, which would have a damaging impact on the capital markets, community banks, and the customers they serve.

Details: In a national press release, ICBA President and CEO Rebeca Romero Rainey said:

• Community banks are committed to ensuring their communities flourish, but the rule’s unprecedented costs and potential liabilities threatened to limit the ability of community banks to raise capital to support lending and discouraged the formation of new community banks.

• The rule provided no meaningful exemption for community banks, which would have subjected many community banks to some of the most onerous provisions of the final rule irrespective of their small asset size.

Details: Following the commission’s vote, SEC staff sent a letter to the Eighth Circuit—which has been hearing legal challenges brought by states and private parties—stating that the agency withdraws its defense of the rule. SEC Acting Chairman Mark Uyeda said the action ceases the agency’s involvement in the defense of the “costly and unnecessarily intrusive” rule.

More: Issued in March 2024, the rule requires disclosures on material climate-related risks, activities to mitigate or adapt to such risks, board oversight, and greenhouse gas emissions that reporting companies produce or indirectly cause by their activities.

ICBA Opposition: In a national news release after the SEC issued its final rule, ICBA criticized its unprecedented costs and potential liabilities. In a 2022 comment letter, ICBA said the rule would drive many SEC-registered community banks away from the public capital markets.