S. 1471 · Where this bill is now
In committee
Introduced in the Senate, Apr 10, 2025
What this bill does
In plain words · AI-written from the official summaryFederal Reserve evaluates climate risks in banks
The Federal Reserve would start testing whether large banks and financial companies have enough money set aside to survive major losses if climate change causes economic problems. Every two years, these firms would go through stress tests based on different climate scenarios. If a company's test results show it's not ready, it has to make a plan to fix the problems, including setting aside more capital. If the plan isn't approved, the company faces limits on how much money it can hand out to shareholders.
How it affects you
If you have money in a bank or invest through financial institutions, this bill could matter to you because it aims to keep major financial companies more stable against climate-related economic shocks. The bill doesn't directly change what customers can do, but it's designed to reduce the risk that climate events could trigger a financial crisis. Large bank customers and investors are most directly affected by stricter stability requirements on these firms.
Read the official summary (Introduced in Senate, Apr 10, 2025)
Climate Change Financial Risk Act of 2025
This bill addresses climate change risk and its potential impact on the financial system.
The Federal Reserve Board must develop financial risk analyses relating to climate change for certain large nonbank financial companies and bank holding companies. Specifically, these entities must be evaluated every two years on whether they have the capital necessary to absorb financial losses that would arise under several different climate change risk scenarios. In response to the results of the evaluation, entities must develop and submit for approval a climate risk resolution plan. The plan must include a capital policy with respect to climate risk planning and targets to remedy identified vulnerabilities. If the plan is not approved, the entity’s ability to make capital distributions is restricted.
The bill also establishes the Climate Risk Scenario Technical Development Group to provide recommendations to the board regarding climate change risk scenarios, and determine the financial and economic risks of these scenarios.
The board must develop a survey to assess (1) the ability of other large financial institutions to withstand each scenario, (2) which surveyed entities have activities in geographical areas or industries that are significantly exposed to the impacts of climate change, and (3) how these surveyed entities plan to adapt to risks presented in each scenario.
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionS. 1471
A BILL
Climate Change Financial Risk Act of 2025
Sponsor: Sen. Brian Schatz (D-HI) · Introduced Apr 10, 2025 · Finance and Financial Sector · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Apr 10, 2025: “Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.”
Sections
Sections · 7
- Sec. 1Short titleNo change
- Sec. 2Sense of congressNo change
- Sec. 3DefinitionsNo change
- Sec. 4Climate Risk Scenario Technical Development GroupNo change
- Sec. 5Development and updating of climate change risk scenariosNo change
- Sec. 6Climate-related enhanced supervision for certain nonbank financial companies and bank holding companiesNo change
- Sec. 7Sub-systemic exploratory surveyNo change