ICBA: FDIC framework could pose unintended consequences for community businesses

ICBA wrote to the FDIC to share its concerns with the agency’s proposed climate risk management framework for large banks, which could limit and discourage financial institutions from doing otherwise lawful business with climate-disfavored industries.

Details: In a comment letter to the FDIC, ICBA:

• Expressed concern that the true aim of the proposal may be to effectuate Operation Choke Point.

• Noted the FDIC published its principles without first conducting any studies or gathering empirical data.

• Said current risk management practices adequately protect community banks from climate-related financial risks.

• Encouraged regulators to work together on a harmonized approach, study the extent to which climate risks pose safety and soundness risks, engage community banks, and clarify expectations to examiners.

• Opposed applying any climate framework to community banks with assets under $100 billion.

• Expressed support for some incentive-based CRA solutions that address climate change.

Background: ICBA previously wrote to the OCC to express similar concerns with its proposed framework, which also was published without any supporting studies or empirical data to demonstrate climate risk as a threat to bank safety and soundness.