Hsu: Community banks raise concerns over climate risk regulation


In remarks today, Acting Comptroller of the Currency Michael Hsu the said community banks and their state professional associations raised their concerns about the OCC’s monitoring and regulatory measures related to climate change in “every meeting” he had with them.

“I want to acknowledge these concerns and commit to continued open dialogue and constructive engagement as we move forward,” Hsu said. “In the coming weeks, I will travel to Lubbock and Midland, Texas to meet with local OCC-supervised community banks and hear from them first-hand about the risks and issues affecting their communities. to actively listen and clarify the common-sense approach we take to managing climate-related risks.”

In February, the American Bankers Association called on the agency to continue to take a “flexible and iterative, principle-based approach” to managing climate-related financial risks for large financial institutions, but urged the agency not to extend its guidelines to medium-sized and community banks. until more solid data becomes available and the risks and opportunities are better understood.

Under Hsu’s leadership, the agency released 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 of the past year: first, the need for coordination and harmonization across jurisdictions, and second, the need to operationalize scenario analyzes and prioritize diverse approaches to these efforts over stress testing. one size resistor. He also announced his intention to appoint a new climate risk manager in the coming weeks to lead the agency’s recently created climate risk office.


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