September 18, 2023
Ahead of Climate Week and Fed’s September Meetings, Pressley, Markey Lead Colleagues in Urging Fed to Factor in Climate
“Recent bank failures reveal the consequences of downplaying or slow-walking management of known but unpriced risks […] it is imperative that the Federal Reserve not repeat the same mistakes with climate.”
WASHINGTON — Today, Congresswoman Ayanna Pressley (MA-07) and Senator Edward J. Markey (D-MA) led nine of their colleagues in writing to Federal Reserve Chair Jerome Powell urging him to consider climate-related financial risks and ensure the financial institutions they oversee do the same. In their letter, the lawmakers highlighted that climate-related weather disasters cost the U.S. economy tens of billions of dollars each year, a figure that will only continue to grow, and that to protect the stability of the U.S. financial system, the Federal Reserve must take action to reduce climate risk.
“The Federal Reserve has acknowledged that climate change poses an emerging risk to the safety and soundness of financial institutions and the financial stability of the United States,” the lawmakers wrote in their letter. “That is why we urge the Federal Reserve to use its existing authority to oversee bank safety and mitigate risks to financial stability, and require financial institutions to submit and execute plans to align their activities with science-based climate targets, including reducing financed emissions.”
“The 2023 banking crisis further underscores the need for action to adequately manage risk,” the letter continued. “Recent bank failures reveal the consequences of downplaying or slow-walking management of known but unpriced risks—and allowing banks that need strong supervision and regulation to go without it. It is imperative that the Federal Reserve not repeat the same mistakes with climate-related financial risks and instead take decisive action to mitigate them. Although banks are already claiming to support reducing financed emissions, even achieving net-zero emissions by 2050, they continue to finance the fossil fuel industry to the tune of hundreds of billions of dollars annually.”
Representatives Rashida Tlaib (MI-12), Alexandria Ocasio-Cortez (NY-14), Barbara Lee (CA-12), and André Carson (IN-07) and Senators Martin Heinrich (D-NM), Bernie Sanders (I-VT), Jeff Merkley (D-OR), Brian Schatz (D-HI), and Elizabeth Warren (D-MA) also joined the letter.
A copy of the letter can be found here.
Congresswoman Pressley, a member of the House Financial Services Committee, has been a vocal champion for consumers and ensuring that the U.S. banking system mitigates climate risk and works for everyday workers and families.
- In March 2023, Rep. Pressley, Rep. Tlaib and Sen. Markey reintroduced the Fossil Free Finance Act, which would direct the Federal Reserve to mandate banks and other Systemically Important Financial Institutions to stop financing projects that increased greenhouse gas emissions and to submit a plan on how they will meet these requirements.
- In August 2021, Rep. Pressley and Reps. Alexandria Ocasio-Cortez (NY-14), Congresswoman Rashida Tlaib (MI-13), Congressman Jesús “Chuy” García (IL-04), and Congressman Mondaire Jones (NY-17) urged President Biden to replace Federal Reserve Chair Jerome Powell with one focused on eliminating climate risk and advancing racial and economic justice.
- In June 2021, she introduced the Greater Supervision in Banking Act, sweeping legislation that strengthens Congressional oversight of the country’s largest banks in order to protect consumers and prevent deceptive behavior from financial institutions.
- In April 2019, she questioned G-SIB CEOs about discriminatory lending practices during their first appearance before Congress in over a decade. She has also introduced the Payment Modernization Act – legislation requiring a more reasonable timeline for the Federal Reserve’s faster payments system and prioritizing consumer protection and wellbeing in the development process.