California officials should clarify that national banks and federal savings institutions are not required to comply with two state climate disclosure rules, the Office of the Comptroller of the Currency said this week.
California lawmakers passed two bills requiring certain businesses in the state to disclose a wide range of greenhouse gas emissions. Senate Bill 253 requires businesses with total annual revenues exceeding $1 billion to report Scope 1, 2 and 3 emissions. SB 261 requires companies with total annual revenues exceeding $500 million to biennially publish a report on climate-related financial risks, including measures to address the risks.
The California Air Resources Board has suspended enforcement of SB 261 pending litigation challenging the legality of the law, but it is moving forward with plans to implement SB 253. In a letter to CARB, the OCC said applying the laws to federally chartered banks “raises serious policy and legal concerns.”
“As the disclosure laws would apply to federally chartered banks without any assessment of risk to the bank and would require the banks to devote significant resources to comply with the laws, the disclosure laws run directly counter to the OCC’s regulation and supervision of federally chartered banks,” the agency said.
The OCC also said the laws would impose undue burden, particularly on smaller banks; harm California customers and disrupt customer relationships; and raise constitutional concerns. It asked CARB to clarify that federally chartered banks are exempt from compliance.
“This approach would be consistent with CARB’s efforts to appropriately scope its rules and address industry-specific challenges, help insulate disclosure laws from additional legal challenges, and promote certainty for regulated entities,” it said.
