Climate Change Financial Risk Act of 2025
Summary
What This Bill Does
The bill requires climate change financial risk assessment and stress testing for banking institutions, defines definitions for climate change financial risk regulation including covered entities, physical risks, transition risks, and value chain, and establishes Climate Risk Scenario Technical Development Group with climate scientists and economists to advise the Federal Reserve. It relies on reporting requirements, compliance mandates, and definition changes. The main policy areas are Finance, Energy, and Agriculture.
Who Benefits and How
Vulnerable and disadvantaged communities could face reduced risk, Climate risk consulting and analytics firms could gain revenue opportunities, and Renewable energy companies could gain revenue opportunities.
Who Bears the Burden and How
Federal Reserve Board of Governors would take on compliance duties, Covered entities (bank holding companies and nonbank financial companies with $250B+ assets) would take on compliance duties, and Nonbank financial companies with $250B+ assets would take on compliance duties.
Key Provisions
- Requires climate change financial risk assessment and stress testing for banking institutions.
- Defines definitions for climate change financial risk regulation including covered entities, physical risks, transition risks, and value chain.
- Establishes Climate Risk Scenario Technical Development Group with climate scientists and economists to advise the Federal Reserve.
- Requires development of three climate change risk scenarios (1.5C, 2C, current trajectory) covering physical and transition risks across the global economy.
- Requires biennial climate risk stress tests for covered entities with capital adequacy evaluation, climate risk resolution plans, and capital distribution restrictions.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
The bill requires climate change financial risk assessment and stress testing for banking institutions, defines definitions for climate change financial risk regulation including covered entities, physical risks, transition risks, and value chain, and establishes Climate Risk Scenario Technical Development Group with climate scientists and economists to advise the Federal Reserve.
Key Policy Areas
Finance, Energy, Agriculture
Primary Purpose
The bill requires climate change financial risk assessment and stress testing for banking institutions, defines definitions for climate change financial risk regulation including covered entities, physical risks, transition risks, and value chain, and establishes Climate Risk Scenario Technical Development Group with climate scientists and economists to advise the Federal Reserve.
Policy Domains
Whole bill
Identified Gains
- Vulnerable and disadvantaged communities
- Climate risk consulting and analytics firms
- Renewable energy companies
- Covered entities (large financial institutions)
Identified Costs
- Federal Reserve Board of Governors
- Covered entities (bank holding companies and nonbank financial companies with $250B+ assets)
- Nonbank financial companies with $250B+ assets
- Federal Reserve System
- Bank holding companies with $250B+ assets
Sponsors
Legislative Progress
In CommitteeMr. Casten introduced the following bill; which was referred to …
Referred to the Committee on Financial Services, and in addition …
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Bank holding companies with $250B+ assets, Bank shareholders and investors, Covered entities (bank holding companies and nonbank financial companies with $250B+ assets)
Positive-direction: Covered entities (large financial institutions)
Negative-direction: Bank holding companies with $250B+ assets, Bank shareholders and investors, Covered entities (bank holding companies and nonbank financial companies with $250B+ assets), Insurance companies, Large bank holding companies, Mid-size financial institutions ($10B+ assets, surveyed entities), Mid-size financial institutions ($10B-$250B assets)
Federal Deposit Insurance Corporation, Federal Reserve Board of Governors, Federal Reserve System
Fossil fuel companies, Fossil fuel companies and energy-intensive industries
Nonbank financial companies with $250B+ assets
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology