In remarks today, Acting Comptroller of the Currency Michael Hsu said community banks and their state trade associations have raised concerns about the OCC’s supervisory and regulatory actions related to climate change in “every meeting” he has had with them.
“I want to acknowledge those concerns and commit to continued open dialogue and constructive engagement as we move forward,” Hsu said. “In the coming weeks, I will be traveling to Lubbock and Midland, Texas, to meet with local OCC-supervised community banks and hear directly from them about the risks and issues impacting their communities. I intend to listen actively and to provide more clarity on the commonsense approach we are taking to climate-related risk management.”
The American Bankers Association in February called on the agency to continue taking a “principles-based approach that is flexible and iterative” to climate-related financial risk management for large financial institutions but urged the agency not to extend its guidance to midsize and community banks until more robust data is available and the risks and opportunities are better understood.
Under Hsu’s leadership, the agency has published a draft set of principles for climate risk management for large banks, and Hsu noted that “two imperatives for large banks have become much clearer to me over the past year: one, the need for coordination and harmonization across jurisdictions, and two, the need to operationalize scenario analyses and to prioritize diverse approaches to such efforts over one-size-fits-all stress tests.” He also signaled plans to appoint a new climate risk officer in the coming weeks to head up the agency’s recently formed Office of Climate Risk.