Overview
Title
Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Office of the Comptroller of the Currency relating to Principles for Climate-Related Financial Risk Management for Large Financial Institutions.
ELI5 AI
H. J. RES. 124 is a plan by the U.S. Congress to cancel a rule about how big banks should deal with money problems related to climate change. If this happens, the rule will not be used, but it might cause confusion because there won't be any new rules to replace it.
Summary AI
H. J. RES. 124 is a joint resolution introduced in the House of Representatives, aiming to nullify a rule proposed by the Office of the Comptroller of the Currency. This rule concerns the "Principles for Climate-Related Financial Risk Management for Large Financial Institutions," which was published on October 30, 2023. The resolution, if passed, would revoke the rule, rendering it ineffective. This legislative action indicates that Congress does not support the enforcement of these principles for managing climate-related financial risks.
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AnalysisAI
General Summary of the Bill
The bill at hand is a joint resolution from the 118th U.S. Congress, titled H.J. Res. 124, which aims to disapprove a specific rule issued by the Office of the Comptroller of the Currency. This rule is related to principles for managing climate-related financial risks specifically for large financial institutions. Essentially, if passed, this disapproval would nullify the aforementioned rule, meaning it would not be enforced.
Summary of Significant Issues
One of the critical issues with the bill is its lack of detailed reasoning or explanation for why the climate-related financial risk management rule is being disapproved. This absence of justification may raise concerns about transparency and the thoroughness with which Congress considered the ramifications of nullifying the rule.
Additionally, the language of the bill—stating that the rule "shall have no force or effect"—might not provide adequate clarity on what the immediate and long-term consequences of this disapproval would be. Consequently, this could lead to confusion or possible legal challenges.
Moreover, the disapproval of the rule creates a potential regulatory gap since the bill does not suggest any alternative measures or guidance to replace the annulled rule. This gap might result in uncertainties regarding how large financial institutions should manage climate-related financial risks moving forward.
The bill also references a federal document ("88 Fed. Reg. 74183; published October 30, 2023") without providing additional context or a summary. This reliance on specific documentation may limit the accessibility of the bill's intent and implications to those not familiar with regulatory processes or federal registers.
Impact on the Public Broadly
At a broad level, this bill could have wide-reaching effects on both the financial sector and the general public. By stalling regulations designed to mitigate climate-related financial risks, there might be an increased vulnerability to financial instability caused by climate events, potentially impacting the economy at large. This risk could ultimately affect consumers, investors, and other stakeholders who depend on the stability of large financial institutions.
Impact on Specific Stakeholders
For financial institutions, especially large ones, the disapproval of this rule might temporarily reduce regulatory burdens associated with managing climate-related risks. This could be seen as positive by those who view such regulations as costly or too restrictive.
However, for advocates of sustainable finance and climate action, the bill may represent a step backward, possibly undermining efforts to incorporate climate risk assessments in financial decision-making. Large financial institutions without mandated guidelines might not prioritize climate risks, potentially leading to broader economic and environmental ramifications.
Overall, the resolution reflects a complex interplay of regulatory oversight, economic priorities, and environmental concerns, each holding varying degrees of importance for different stakeholders. Understanding the potential impacts requires a careful consideration of these interconnected elements.
Issues
The bill disapproves of a significant climate-related financial risk management rule without providing specific reasons or assessments of the potential impacts, raising concerns about the transparency and thoroughness of the decision-making process. This is found in the section discussing the lack of reasoning or discussion of impacts regarding the disapproval.
The language stating 'such rule shall have no force or effect' may not provide enough specificity regarding the procedures or consequences following this disapproval, leading to potential confusion or legal challenges. This is articulated in the section remarking on the need for clearer procedural implications post-disapproval.
There is a risk of leaving a regulatory gap as the bill does not indicate any alternative measures or guidance to replace the disapproved rule. This could lead to uncertainties in financial risk management related to climate risks. This issue is noted in the section highlighting the absence of alternatives to the disapproved rule.
The reference to a specific federal document ('88 Fed. Reg. 74183; published October 30, 2023') without providing context or a summary may render the bill unclear or inaccessible to those not directly involved in the legislative or regulatory process, posing a challenge for broader stakeholder understanding. This is mentioned in the section emphasizing the assumption of familiarity with the referenced document.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
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Summary AI
Congress is rejecting a rule from the Office of the Comptroller of the Currency about managing climate-related financial risks for big banks, which means the rule will not be enforced.