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WASHINGTON, D.C. – Congressman Troy Balderson (OH-12) introduced legislation today to nullify a final interagency guidance from the Federal Reserve, Comptroller of the Currency, and the Federal Deposit Insurance Corporation titled, Principles for Climate-Related Financial Risk Management for Large Financial Institutions. Congressman Kevin Hern (OK-01), Chairman of the Republican Study Committee, and Congressman August Pfluger (TX-11), Chairman of the House Energy Action Team (HEAT), joined Balderson as original co-sponsors.

Directed at banks and other financial institutions, this guidance encourages them to manage “climate-related financial risks” associated with their investments and loans. Critics argue that the guidance could serve as a backdoor to restrict funding and resources for American energy industries, such as Ohio’s vital oil and gas sector, which supports more than 351,000 jobs and contributes $55 billion to the state's economy. The vague language in this guidance could allow for potential punitive actions against banks doing business with industries that the Biden-Harris Administration seeks to phase out, effectively pressuring financial institutions to support environmental, social, and governance (ESG) policies over sound financial decisions.

“This guidance is nothing more than a back-door effort by the Biden-Harris Administration and financial regulators to push their radical ESG agenda,” said Balderson. “Under this framework, federal regulators could pressure banks into avoiding industries crucial to Ohio, including oil and gas, by penalizing companies that don’t follow the administration’s climate priorities. This puts the wokeness ahead of sound investment strategies, costing everyday Americans.”

Power grid experts have warned that the single largest threat to our nation’s energy security is misguided federal and state policies. Federal rules, such as the Clean Power Plan 2.0, are forcing the United States’ most reliable power plants to shut down, even as electricity demand grows at historic levels. With this new ESG rule, banks could face regulatory backlash for providing regular financial services to the oil and gas industry–further imperiling American energy security.

In September, Balderson joined his House colleagues in passing H.R. 4790, the Prioritizing Economic Growth Over Woke Policies Act, which cuts back on the Biden-Harris Administration’s burdensome ESG policies for American businesses and enhances Congressional oversight of federal financial regulatory agencies.

Balderson’s bill nullifies the final interagency guidance and prevents the Federal Reserve, Comptroller of the Currency, and the Federal Deposit Insurance Corporation from issuing any substantially similar guidance in the future.

Full text of the legislation can be found HERE.