Sec. 2. Financial Stability Oversight Council committees on climate financial risk
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Subtitle A of the Financial Stability Act of 2010 ( 12 U.S.C. 5321 et seq. ) is amended by inserting after section 121 ( 12 U.S.C. 5331 ) the following: There is established in the Council the Climate Financial Risk Committee, which shall— support the Council in identifying priority areas for assessing and mitigating climate-related risks to the financial system; serve as a coordinating body to share information, facilitate the development of common approaches and standards, and facilitate communication across Council member agencies; collaborate with the Office of Financial Research to compile climate and financial data from public sources and from member agencies of the Council, provide analytical tools and software, and otherwise assist member agencies of the Council in jointly analyzing potential financial stability risks; and provide updates to the Council on the status of the efforts of the Council and its member agencies to identify and address climate financial risk, including related to— incorporating climate financial risk into regulatory and supervisory programs; improving data and methodologies; enhancing climate-related disclosures; and assessing climate-related risks to the financial stability of the United States.
The Climate Financial Risk Committee shall consist of staff representatives from each of the member agencies of the Council and shall be led by the Deputy Assistant Secretary of the Council. The Climate Financial Risk Committee may not be terminated or modified except pursuant to an Act of Congress. There is established in the Council the Advisory Committee on Climate Risk, which shall— consult and assist the Council with gathering information on, conducting analysis of, and making recommendations to identify, assess, and mitigate climate-related risks to the financial system, and other duties that the Climate Financial Risk Committee or the Council may assign; and meet with the Council on a bimonthly basis.
The Advisory Committee shall consist of not more than 30 members as follows: 8 members who are climate science experts with a demonstrated record of peer-reviewed publications and professional contributions to climate modeling, climate financial risk assessment, or related areas, of whom— 2 shall be appointed by the Secretary of Energy; 2 shall be appointed by the Administrator of the Environmental Protection Agency; and 4 shall be appointed by the Director of the National Science Foundation. 8 members appointed by the Council who are experts in climate economics or climate financial risk, of whom not fewer than one member is an expert in one of the following areas:
Insurance. Capital markets. Banking. International financial markets. Housing finance. The perspective of asset owners. 2 members from non-governmental research institutions that offer expertise in environmental or clean energy policy, appointed by the Council. 2 members from consumer advocacy or labor union groups, appointed by the Director of the Consumer Financial Protection Bureau. 4 members from investor networks or shareholder advocacy groups, appointed by the Chairman of the Securities and Exchange Commission.
Relevant stakeholders from the financial services industry, commercial businesses, or other organizations, which shall not include any stakeholders from the oil or gas industry. The members of the Advisory Committee shall be appointed for 3-year terms, except that the initial terms of the first members of the Advisory Committee shall be staggered so that— 8 members serve terms of 3 years; 8 members serve terms of 2 years; and 8 members serve terms of 1 years. A member of the Advisory Committee may not be removed prior to the expiration of the term of such member unless 2/3 of the heads of the member agencies of the Council vote in favor of such removal.
The Council shall consult with the Advisory Committee in carrying out the requirements of this section. Each member agency should develop and make publicly available a strategy to identify and mitigate climate financial risk within the jurisdiction of the member agency. The Council shall— facilitate the sharing of best practices on addressing climate financial risk across agencies with members serving on the Advisory Committee; and assign the Office of Financial Research to conduct ongoing research into climate financial risk.
The Council shall include a section on climate financial risk in— the annual report of the Council to Congress; and if relevant, in any other report to Congress. Not later than 270 days after the date of enactment of this section, and annually thereafter, the Council shall, in coordination with the Advisory Committee on Climate Risk established under section 121B and the Climate Financial Risk Committee established under section 121A, publish a report that— assesses— the potential impact of climate-related risks on the financial stability of the United States; the extent to which Federal and State financial regulatory agencies have sufficient expertise on climate financial risk; the quality of data available to Council members to properly assess climate financial risk and any gaps in data that exist; the extent to which property and casualty insurance availability and affordability trends are affecting credit markets, housing finance, and financial stability; the extent to which nonbank financial companies and large, interconnected bank holding companies supervised by the Board of Governors are engaging in safe and sound management of climate financial risks; the degree of coordination among Federal and State financial regulatory agencies on climate financial risk; the degree of coordination by Federal and State financial regulatory agencies with international financial regulatory authorities on climate financial risk; how climate-related disclosure requirements in the United States compare to similar disclosure regimes in other countries; and any other areas the Council determines important; and provides recommendations based on the assessments conducted under paragraph
(1)to Federal and State financial regulatory agencies and to Congress on how to improve the ability of the financial regulatory system in the United States to identify and mitigate both the short- and long-term financial risks associated with climate change. . The table of contents of the Dodd-Frank Wall Street Reform and Consumer Protection Act in section 1(b) of that Act is amended by inserting after the item relating to section 121 the following: Sec. 121A. Climate Financial Risk Committee. Sec. 121B. Advisory Committee on Climate Risk. Sec. 121C. Report on climate financial risk. .
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Sec. 2
Financial Stability Oversight Council committees on climate financial risk
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