Back in April, the NCUA requested information on “current and future climate and natural disaster risks to federally insured credit unions, related entities, their members, and the National Credit Union Share Insurance Fund.” This was in response to the House Financial Services Committee considering legislation that would require financial regulators—including the NCUA—to report any proposals on climate change they are considering before they institute such proposals.
At the time, the move was met with pushback, as credit unions and agencies alike argued that the NCUA had more important matters to deal with and should be prioritizing those. Additionally, they stated that it was not the NCUA’s place to determine what actions credit unions should be taking against climate change, rather it should be the responsibility of individual credit unions to make those choices. (You can read more about that here.)
Now, as the time for submitting information and comments has passed, the House Financial Services Committee’s Financial Institutions and Monetary Policy subcommittee will be holding a hearing on Tuesday, July 18th, to begin discussions on the topic, ultimately to determine if financial regulatory agencies can and should remain politically independent.
The bill, and resulting hearings, are supported by Republicans, who are attempting to limit financial regulators—and as a result, financial institutions—from considering Environmental, Social, and Governance (ESG) in regard to policies they may enact. The proposed bill is a safeguard to prevent the current administration from pushing climate reform through various government agencies.
Ahead of the hearing, the Republican ESG Working Group released a report in which they pledged their dedication “to protect the financial interest of everyday investors from progressive activists who are using our institutions to force far-left ideology on Americans.”
The upcoming hearing will feature testimonies from key regulatory agencies, including the NCUA’s deputy executive director, Rendell Jones. The NCUA, despite receiving criticism for its informational requests on the topic, seems to favor the Republican viewpoint—namely, NCUA board members Rodney Hood and Kyle Hauptman. Chairman Todd Harper, on the other hand, is in favor of regulator agencies offering guidance to financial institutions on the matter.
The hearing on Tuesday will cover discussions and testimonies on three different bills related to climate change policies, all of which require financial regulators to provide Congress with notice, reports, or testimonies should they 1) meet with non-government agencies on policy change 2) “implement policy recommendations of non-governmental organizations with significant projected economic effects,” and 3) implement recommendations based on an Executive Order or the Financial Stability Oversight Council.
The hearing will begin at 10 am on Tuesday, July 18th.
