I 
118TH CONGRESS 
1ST SESSION H. R. 2443 
To amend the Bank Holding Company Act of 1956 and the Financial Sta-
bility Act of 2010 to require a reduction of financed emissions to protect 
financial stability, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 30, 2023 
Ms. PRESSLEY (for herself, Ms. TLAIB, Ms. JAYAPAL, and Mr. BOWMAN) in-
troduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To amend the Bank Holding Company Act of 1956 and 
the Financial Stability Act of 2010 to require a reduction 
of financed emissions to protect financial stability, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Fossil Free Financing 
Act of 2023’’. 
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SEC. 
2. 
ALIGNMENT 
OF 
FINANCED 
EMISSIONS 
WITH 
SCIENCE-BASED TARGETS. 
The Bank Holding Company Act of 1956 (12 U.S.C. 
1841 et seq.) is amended by adding at the end the fol-
lowing: 
‘‘SEC. 15. ALIGNMENT OF FINANCED EMISSIONS WITH 
SCIENCE-BASED TARGETS. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) Carbon offsets—The term ‘carbon offsets’ 
means an emissions reduction or removal of green-
house gases in a manner calculated and traced for 
the purpose of offsetting an entity’s greenhouse gas 
emissions. 
‘‘(2) COVERED BANK HOLDING COMPANY.—The 
term ‘covered bank holding company’ means a bank 
holding company with total consolidated assets not 
less than $50,000,000,000. 
‘‘(3) DEFORESTATION
RISK
COMMODITIES.— 
The term ‘deforestation risk commodities’ means 
globally traded goods and raw materials— 
‘‘(A) that originate from natural forest 
ecosystems— 
‘‘(i) directly from within forest areas; 
or 
‘‘(ii) from areas previously under for-
est cover; and 
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‘‘(B) the extraction or production of which 
contributes significantly to the conversion of 
natural forest to agriculture, tree plantation, or 
other nonforest land use. 
‘‘(4) FINANCED
EMISSIONS.—The term ‘fi-
nanced emissions’ means, with respect to a covered 
bank holding company, and any nonbank financial 
company supervised by the Board in accordance with 
section 113 of the Financial Stability Act of 2010 
(12 U.S.C. 5323), the greenhouse gas emissions of 
such company, expressed in metric tons of carbon di-
oxide equivalent, attributable to investment in, or 
the providing of financial services to, another com-
pany or project of another company, including— 
‘‘(A) investments in a debt or equity in-
vestment in such another company or the assets 
of such another company; 
‘‘(B) project finance investment; 
‘‘(C) underwriting; 
‘‘(D) syndication or securitization of loans 
or asset-backed securities; 
‘‘(E) derivative transactions related to fi-
nancing or hedging; and 
‘‘(F) market making. 
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‘‘(5) FOSSIL FUEL FINANCING.—The term ‘fos-
sil fuel financing’ means, with respect to a covered 
bank holding company, investment in— 
‘‘(A) a company that derives not less than 
15 percent revenue from exploration, extraction, 
processing, exporting, transporting, and any 
other significant action with respect to oil, nat-
ural gas, coal, or any byproduct thereof; or 
‘‘(B) a fossil fuel project. 
‘‘(6) FOSSIL FUEL PROJECT.—The term ‘fossil 
fuel project’ means a project intended to— 
‘‘(A) facilitate or expand exploration, ex-
traction, processing, exporting, transporting, or 
any other significant action with respect to oil, 
natural gas, coal; or 
‘‘(B) construct any infrastructure related 
to the activities described in subparagraph (A), 
such as wells, pipelines, terminals, refineries, or 
utility-sale generation facilities. 
‘‘(7) GREENHOUSE GAS.—The term ‘greenhouse 
gas’ means carbon dioxide, methane, nitrous oxide, 
nitrogen 
trifluoride, 
hydrofluorocarbons, 
perfluorocarbons, and sulfur hexafluoride. 
‘‘(8) NATURAL
FOREST.—The term ‘natural 
forest’ means a natural arboreal ecosystem that— 
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‘‘(A) has a species composition a signifi-
cant percentage of which is native species; and 
‘‘(B) contains a tree canopy cover of more 
than 10 percent over an area of not less than 
0.5 hectares. 
‘‘(9) 
NEW
OR
EXPANDED
FOSSIL
FUEL 
PROJECT.—The term ‘new or expanded fossil fuel 
project’ means a fossil fuel project that would in-
crease the— 
‘‘(A) level of proven or developable oil, nat-
ural gas, or coal reserves; 
‘‘(B) midstream throughput of pipelines, 
terminals, or refineries; or 
‘‘(C) combustion of oil, natural gas, or coal 
for utility-scale electricity generation. 
‘‘(b) REQUIREMENTS.—Not later than 210 days after 
the date of enactment of this section, and not less than 
once every 2 years thereafter, a covered bank holding com-
pany shall— 
‘‘(1) submit to the Board an emission reduction 
plan for reducing emissions in accordance with this 
section; and 
‘‘(2) if the plan is accepted under subsection 
(d), implement such plan. 
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‘‘(c) ELEMENTS
OF PLAN.—Each plan required 
under subsection (b)(1)— 
‘‘(1) shall include— 
‘‘(A) a plan for the covered bank holding 
company to reach zero financed emissions not 
later than January 1, 2050; 
‘‘(B) a plan to reduce the financed emis-
sions of the bank holding company by 50 per-
cent not later than January 1, 2030; 
‘‘(C) a plan to discontinue new or ex-
panded fossil fuel projects not later than Janu-
ary 1, 2023; 
‘‘(D) a plan for the covered bank holding 
company to discontinue thermal coal financing 
not later than January 1, 2025; 
‘‘(E) a plan for the covered bank holding 
company to discontinue all fossil fuel financing 
not later than January 1, 2030; 
‘‘(F) a plan for the covered bank holding 
company to eliminate financing of deforestation 
risk commodities; and 
‘‘(G) such other requirements as the Board 
determines is necessary to protect the financial 
stability of the United States; 
‘‘(2) may not include carbon offsets; 
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‘‘(3) may include proven negative carbon emis-
sion technologies to meet the requirements under 
paragraph (1)(A) if the technologies do not nega-
tively impact low-income, minority, or indigenous 
communities; and 
‘‘(4) shall prioritize— 
‘‘(A) the covered bank holding company 
withdrawing funding from companies and 
projects that have a disproportionately negative 
impact on the health and well-being of low-in-
come and minority communities; 
‘‘(B) lending to companies for purposes of 
carrying out severance, retraining, and other 
benefits to workers impacted by the transition 
to zero financed emissions; and 
‘‘(C) enhanced due diligence about the im-
pacts of financing on biodiversity and commu-
nity and the framework of the client for and 
track record in— 
‘‘(i) managing greenhouse gas and 
other emissions; and 
‘‘(ii) compliance with regulations and 
international standards. 
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‘‘(d) CONSIDERATION OF PLAN.—Not later than 180 
days after the date on which the Board receives a plan 
submitted under subsection (b)(1), the Board shall— 
‘‘(1) accept the plan; or 
‘‘(2)(A) reject the plan if the plan does not 
align with science-based targets without the use of 
offsets or unproven carbon emission reduction tech-
nologies; and 
‘‘(B) require the covered bank holding company 
to revise such plan in accordance with the sugges-
tions of the Board. 
‘‘(e) PENALTIES.—If a covered bank holding com-
pany does not submit a plan in accordance with this sec-
tion or meet the requirements set out in such a plan— 
‘‘(1) the Board shall— 
‘‘(A) apply the penalties under section 8 
under regulations prescribed by the Board; 
‘‘(B) require divestiture of assets in order 
to bring the financed emissions of a covered 
bank holding company into compliance with the 
requirements set out in such a plan; and 
‘‘(C) notify the Board of Directors of the 
Federal Deposit Insurance Corporation of the 
noncompliance of the covered bank holding 
company; and 
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‘‘(2) the Board of Directors of the Federal De-
posit Insurance Corporation may, with respect to 
any covered bank holding company described in 
paragraph (1)(C) or a subsidiary of the bank hold-
ing company that contributes to the failure of the 
covered bank holding company to comply with this 
section— 
‘‘(A) terminate the insured status of the 
insured depository institution of which the bank 
holding company has control under section 
8(a)(2) of the Federal Deposit Insurance Act 
(12 U.S.C. 1818(a)(2)); and 
‘‘(B) carry out any other corrective action 
available under section 38 of the Federal De-
posit Insurance Act (12 U.S.C. 1831o) for the 
insured depository institution of which the bank 
holding company has control under section 
8(a)(2) of the Federal Deposit Insurance Act 
(12 U.S.C. 1818(a)(2)). 
‘‘(f) REGULATIONS.—Not later than 180 days after 
the date of enactment of this section, the Board shall issue 
regulations establishing the format and timing for submis-
sion of the plans required under this section.’’. 
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SEC. 3. CONTRIBUTION TO CLIMATE CHANGE INCLUDED IN 
FSOC DESIGNATION. 
(a) AUTHORITY TO REQUIRE SUPERVISION
AND 
REGULATION OF CERTAIN NONBANK FINANCIAL COMPA-
NIES.—Section 113 of the Financial Stability Act of 2010 
(12 U.S.C. 5323) is amended— 
(1) in subsection (a)(2)— 
(A) in subparagraph (J), by striking ‘‘and’’ 
at the end; 
(B) by redesignating subparagraph (K) as 
subparagraph (L); and 
(C) by inserting after subparagraph (J) 
the following: 
‘‘(K) the extent to which the company 
makes a nontrivial contribution to the financed 
emissions, as defined in section 15 of the Bank 
Holding Company Act of 1956, of the financial 
system of the United States; and’’; and 
(2) in subsection (b)(2)— 
(A) in subparagraph (J), by striking ‘‘and’’ 
at the end; 
(B) by redesignating subparagraph (K) as 
subparagraph (L); and 
(C) by inserting after subparagraph (J) 
the following: 
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‘‘(K) the extent to which the company 
makes a nontrivial contribution to the financed 
emissions, as defined in section 15 of the Bank 
Holding Company Act of 1956, of the financial 
system of the United States; and’’. 
(b) ENHANCED
SUPERVISION
AND
PRUDENTIAL 
STANDARDS FOR NONBANK FINANCIAL COMPANIES SU-
PERVISED BY THE BOARD OF GOVERNORS AND CERTAIN 
BANK HOLDING COMPANIES.— 
(1) DEVELOPMENT
OF
PRUDENTIAL
STAND-
ARDS.—Section 115(b)(1) of the Financial Stability 
Act of 2010 (12 U.S.C. 5325(b)(1)) is amended— 
(A) in subparagraph (H), by striking 
‘‘and’’; 
(B) in subparagraph (I), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(J) divestiture of financed emissions, as 
defined in section 15 of the Bank Holding Com-
pany Act of 1956.’’. 
(2) 
REQUIRED
STANDARDS.—Section 
165(b)(1)(A) of the Financial Stability Act of 2010 
(12 U.S.C. 5365(b)(1)(A)) is amended— 
(A) in clause (iv), by striking ‘‘and’’ at the 
end; 
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(B) in clause (v), by striking the period 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(vi) emissions reduction plans in ac-
cordance with section 15 of the Bank 
Holding Company Act of 1956.’’. 
SEC. 4. REPORTS. 
(a) DEFINITIONS.—In this section: 
(1) COVERED
BANK
HOLDING
COMPANY; FI-
NANCED
EMISSIONS.—The terms ‘‘covered bank 
holding company’’ and ‘‘financed emissions’’ have 
the meanings given the terms in section 15 of the 
Bank Holding Company Act of 1956, as added by 
section 2 of this Act. 
(2) SCIENCE-BASED EMISSIONS TARGETS.—The 
term ‘‘science-based emissions targets’’ means reduc-
tion in greenhouse gas emissions consistent with pre-
venting an increase in global average temperature of 
not less than 1.5 degrees Celsius compared to pre- 
industrial levels. 
(b) INITIAL REPORT.—Not later than 180 days after 
the date of enactment of this Act, the Board of Governors 
of the Federal Reserve System shall submit to Congress 
a report that— 
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(1) identifies the current level of financed emis-
sions in the financial system of the United States; 
(2) includes an analysis of trends in financed 
emissions reductions; 
(3) includes a summary of the commitments of 
covered bank holding companies to reduce financed 
emissions; 
(4) estimates the financed emissions in the fi-
nancial system of the United States needed to meet 
science-based emissions targets; 
(5) identifies regulatory gaps in reducing fi-
nanced emissions that cannot be addressed with au-
thorities of the Board and recommendations for ad-
dressing such gaps; 
(6) identifies data quality challenges for assess-
ing financed emissions and recommendations to ad-
dress those challenges; 
(7) identifies the equitable transition needs for 
workers and communities that will be impacted by a 
shift to a zero financed emissions economy; 
(8) analyzes— 
(A) the number and groups of people af-
fected by a transition to zero financed emis-
sions; and 
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(B) the economic impact of such a transi-
tion with respect to such groups; and 
(9) identifies regulatory and legislative options 
for mitigating the economic impacts described in 
paragraph (8)(B), including— 
(A) the use of existing authorities, includ-
ing the Community Reinvestment Act of 1977 
(12 U.S.C. 2901 et seq.) and emergency lend-
ing powers under section 13 of the Federal Re-
serve Act (12 U.S.C. 342); and 
(B) the establishment of a public invest-
ment bank to finance investment in an equi-
table transition to a zero financed emissions 
economy. 
(c) PERIODIC REPORT.—Not later than 180 days 
after the date of enactment of this Act, and not less than 
once every 2 years thereafter, the Board of Governors of 
the Federal Reserve System shall submit to Congress a 
report that includes— 
(1) an analysis of the progress against aligning 
with financed emissions targets; 
(2) the estimates described in subsection (b)(4); 
(3) an analysis of the progress made in the pre-
ceding 2 years toward an equitable transition to a 
zero financed emissions economy; and 
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(4) recommendations with respect to assistance 
Congress and Federal agencies may provide to— 
(A) facilitate a reduction of financed emis-
sions; and 
(B) support an equitable transition to a 
zero financed emissions economy. 
(d) COLLECTION OF DATA.—The Board of Governors 
of the Federal Reserve System shall collect such data as 
needed from bank holding companies to carry out the re-
ports required under this section. 
Æ 
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