WASHINGTON–The Independent Community Bankers of America is expressing concerns over the effects the Federal Reserve Board’s proposals around climate risk will have on banks of less than $100 billion in assets, and especially on community banks.
“While the Federal Reserve Board’s proposed climate-related financial risk management principles are tailored to bank size, complexity, risk profile and operations, ICBA remains concerned that new climate risk management frameworks will trickle down to community banks and inevitably impact the communities they serve,” ICBA President and CEO Rebeca Romero Rainey said in a statement. “Community banks have decades of experience effectively managing concentration risks and responding to extreme weather events and natural disasters in their communities — meaning new and onerous climate risk management frameworks are counterproductive.”
Other Points Raised
In its comment letter to the Federal Reserve Board, the ICBA said it also:
- Opposes applying any climate-related financial risk framework to community banks with less than $100 billion in assets
- Has concern that the true aim of the proposal may be to effectuate Operation Choke Point by cutting off legal but disfavored industries from the financial system
- Noted the Fed, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corp. all published their principles without first conducting studies or gathering empirical data.
- Believes current risk management practices adequately protect community banks from climate-related financial risks
- Encourages regulators to work together on a harmonized approach to climate principles, study the extent to which climate risks pose significant safety and soundness risks, hold community bank outreach meetings and exercises, and expressly inform examiners that banks are not expected to choke off legal customers or industries from the financial system.
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