II 

116TH CONGRESS 

2D SESSION S. 4835 

To prohibit bank holding companies from facilitating fossil fuel production 

from new sources or new or expanded fossil infrastructure that would 

drive such production, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 21 (legislative day, OCTOBER 19), 2020 

Mr. MERKLEY introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To prohibit bank holding companies from facilitating fossil 

fuel production from new sources or new or expanded 

fossil infrastructure that would drive such production, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protecting America’s 

5 Economy from the Carbon Bubble Act of 2020’’. 


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1 SEC. 2. PROHIBITION ON FACILITATING FOSSIL FUEL PRO2 DUCTION FROM NEW SOURCES. 

3 The Bank Holding Company Act of 1956 (12 U.S.C. 

4 1841 et seq.) is amended by adding at the end the fol5 lowing: 

6 ‘‘SEC. 15. PROHIBITION ON FACILITATING FOSSIL FUEL 

7 PRODUCTION FROM NEW SOURCES. 

8 ‘‘(a) DEFINITIONS.—In this section— 

9 ‘‘(1) the term ‘financial company’ means— 

10 ‘‘(A) a bank holding company, savings and 

11 loan holding company, or similar institution; 

12 ‘‘(B) a foreign banking organization or 

13 company that is treated as a bank holding com14 pany under this Act; 

15 ‘‘(C) an insured depository institution, a 

16 thrift institution, a savings association, an in17 dustrial loan company, or similar institution; or 

18 ‘‘(D) any subsidiary, agency, or affiliate of 

19 an entity described in subparagraph (A) or (B); 

20 ‘‘(2) the term ‘fossil fuel’ means coal, petro21 leum, natural gas, or any derivative of coal, petro22 leum, or natural gas that is used for fuel; 

23 ‘‘(3) the term ‘fossil infrastructure’ means fossil 

24 fuel-related projects, including wells, rail infrastruc25 ture, pipelines, terminals, refineries, and power 

26 plants; 


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1 ‘‘(4) the term ‘new sources’ means— 

2 ‘‘(A) any production in excess of proven 

3 developed producing reserves of fossil fuels as 

4 of the date of enactment of this section; or 

5 ‘‘(B) new or expanded fossil infrastructure 

6 that would facilitate the production described in 

7 subparagraph (A); and 

8 ‘‘(5) the term ‘production’ means extractive or 

9 production activities that result in fossil fuels being 

10 made available for refining or use. 

11 ‘‘(b) PROHIBITION.—No financial company may fa12 cilitate fossil fuel production, including by— 

13 ‘‘(1) providing loans to, making investments in, 

14 or otherwise engaging in any activity that is finan15 cial in nature, or incidental to such financial activ16 ity, with a fossil fuel company; 

17 ‘‘(2) providing loans to, making investments in, 

18 or otherwise engaging in any activity that is finan19 cial in nature, or incidental to such financial activ20 ity, for a fossil fuel project; 

21 ‘‘(3) taking compensation to arrange or facili22 tate a transaction that provides funds for fossil fuel 

23 production from new sources; 

24 ‘‘(4) securitizing assets that provide funds for 

25 fossil fuel production from new sources; 


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1 ‘‘(5) entering into a derivatives transaction de2 signed to provide funding for, facilitate, or hedge 

3 risks from fossil fuel production from new sources; 

4 ‘‘(6) engaging in any activity that is com5 plementary to a financial activity involving fossil fuel 

6 production from new sources, including financing the 

7 international trade thereof; or 

8 ‘‘(7) any other form of activity defined by regu9 lators or supervisors of the financial company. 

10 ‘‘(c) PENALTIES.— 

11 ‘‘(1) CRIMINAL PENALTY.— 

12 ‘‘(A) IN GENERAL.—Whoever knowingly 

13 violates any provision of this section or, being 

14 a company, violates any regulation or order 

15 issued by the Board under this section, shall be 

16 imprisoned not more than 1 year, fined not 

17 more than $1,000,000 per day for each day 

18 during which the violation continues, or both. 

19 ‘‘(B) INTENT TO DECEIVE, DEFRAUD, OR

20 PROFIT.—Whoever, with the intent to deceive, 

21 defraud, or profit significantly, knowingly vio22 lates any provision of this section shall be im23 prisoned not more than 5 years, fined not more 

24 than $5,000,000 per day for each day during 

25 which the violation continues, or both. 


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1 ‘‘(2) PROHIBITION ON EMPLOYMENT.—Any in2 dividual who knowingly violates any provision of this 

3 section shall be banned from future employment 

4 with any bank holding company or publicly traded 

5 corporation. 

6 ‘‘(3) CIVIL MONETARY PENALTY.—Any com7 pany that violates, and any individual who partici8 pates in a violation of, any provision of this section, 

9 or any regulation or order issued pursuant thereto, 

10 shall forfeit all revenues associated with such a vio11 lation and pay an additional civil penalty of not 

12 more than $25,000 for each day during which the 

13 violation continues. 

14 ‘‘(d) COMPLIANCE PROGRAM.— 

15 ‘‘(1) IN GENERAL.—Banking organizations 

16 shall maintain policies and procedures reasonably 

17 designed to ensure that relationships with customers 

18 or counterparties do not facilitate fossil fuel produc19 tion from new sources. 

20 ‘‘(2) ATTESTATION.—The chief executive officer 

21 of each financial company shall comply with an at22 testation for compliance with this section, subject to 

23 such rules as the Board may prescribe that shall be 

24 no less strict than those set forth under section 


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1 351.20(c) of title 12, Code of Federal Regulations, 

2 or any successor regulation. 

3 ‘‘(3) SUPERVISION.—The appropriate Federal 

4 banking agency shall supervise the policies and pro5 cedures described in this subsection and the imple6 mentation of those policies and procedures.’’. 

Æ 


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