Protecting America's Economy from the Carbon Bubble Act of 2022
Bill: S.5264 | Sponsor: Sen. Merkley, Jeff (D-OR)
Policy area: Finance and Financial Sector

Summary:
Protecting America's Economy from the Carbon Bubble Act of 2022
This bill prohibits certain financial companies (including bank holding companies, savings and loan holding companies, and insured depository institutions) from involvement in fossil fuel production. Prohibited activities include
Violators are subject to criminal and civil penalties.

To amend the Bank Holding Company Act of 1956 to prohibit bank holding 
companies from facilitating fossil fuel production from new sources, or 
    from facilitating transactions that would provide funds for the 
construction of new or expanded fossil infrastructure that would drive 
                such production, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting America's Economy from 
the Carbon Bubble Act of 2022''.

SEC. 2. PROHIBITION ON FACILITATING FOSSIL FUEL PRODUCTION FROM NEW 
              SOURCES.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is 
amended by adding at the end the following:

``SEC. 15. PROHIBITION ON FACILITATING FOSSIL FUEL PRODUCTION FROM NEW 
              SOURCES.

    ``(a) Definitions.--In this section--
            ``(1) the terms `exchange', `issuer', and `security' have 
        the meanings given those terms in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a));
            ``(2) the term `financial company' means--
                    ``(A) a bank holding company, savings and loan 
                holding company, or similar institution;
                    ``(B) a foreign banking organization or company 
                that is treated as a bank holding company under this 
                Act;
                    ``(C) an insured depository institution, a thrift 
                institution, a savings association, an industrial loan 
                company, or similar institution; or
                    ``(D) any subsidiary, agency, or affiliate of an 
                entity described in subparagraph (A), (B), or (C);
            ``(3) the term `fossil fuel' means coal, petroleum, natural 
        gas, or any derivative of coal, petroleum, or natural gas, that 
        is used for fuel, including hydrogen combined with any such 
        derivative;
            ``(4) the term `fossil infrastructure' means fossil fuel-
        related projects, including wells, rail infrastructure, 
        pipelines, terminals, refineries, and power plants;
            ``(5) the term `national securities exchange' means an 
        exchange registered as a national securities exchange in 
        accordance with section 6 of the Securities Exchange Act of 
        1934 (15 U.S.C. 78f);
            ``(6) the term `new sources' means--
                    ``(A) any production in excess of proven developed 
                producing reserves of fossil fuels, as of the date of 
                enactment of this section; or
                    ``(B) new or expanded fossil infrastructure that 
                would facilitate the production described in 
                subparagraph (A);
            ``(7) the term `production' means extractive or production 
        activities that result in fossil fuels being made available for 
        refining or use; and
            ``(8) the term `publicly traded entity' means an issuer, 
        the securities of which are listed on a national securities 
        exchange.
    ``(b) Prohibition.--No financial company may facilitate production, 
including by--
            ``(1) making loans to, making investments in, or otherwise 
        engaging in any activity that is financial in nature, or 
        incidental to such financial activity, with a fossil fuel 
        company;
            ``(2) making loans to, making investments in, or otherwise 
        engaging in any activity that is financial in nature, or 
        incidental to such financial activity, for a fossil fuel 
        project;
            ``(3) taking compensation to arrange, or facilitate a 
        transaction that provides funds for, production with respect to 
        new sources;
            ``(4) securitizing assets that provide funds for production 
        with respect to new sources;
            ``(5) entering into a derivatives transaction designed to 
        provide funding for, facilitate, or hedge risks from production 
        with respect to new sources;
            ``(6) engaging in any activity that is complementary to a 
        financial activity involving production with respect to new 
        sources, including financing the international trade of 
        production with respect to new sources; or
            ``(7) engaging in any other form of activity defined by 
        regulators or supervisors of the financial company.
    ``(c) Compliance Program.--
            ``(1) In general.--Each financial company shall maintain 
        policies and procedures reasonably designed to ensure that 
        relationships with customers or counterparties do not 
        facilitate production with respect to new sources.
            ``(2) Attestation.--The chief executive officer of each 
        financial company shall comply with an attestation for 
        compliance with this section, subject to such rules as the 
        Board may prescribe that shall be no less strict than those set 
        forth under section 351.20(c) of title 12, Code of Federal 
        Regulations, or any successor regulation.
            ``(3) Supervision.--The appropriate Federal banking agency 
        shall supervise the policies and procedures described in this 
        subsection and the implementation of those policies and 
        procedures.
    ``(d) Penalties.--
            ``(1) Criminal penalty.--
                    ``(A) In general.--Whoever knowingly violates any 
                provision of this section or, being a company, violates 
                any regulation or order issued by the Board under this 
                section, shall be imprisoned not more than 1 year, 
                fined not more than $1,000,000 per day for each day 
                during which the violation continues, or both.
                    ``(B) Intent to deceive, defraud, or profit.--
                Whoever, with the intent to deceive, defraud, or profit 
                significantly, knowingly violates any provision of this 
                section shall be imprisoned not more than 5 years, 
                fined not more than $5,000,000 per day for each day 
                during which the violation continues, or both.
            ``(2) Prohibition on employment.--Any individual who 
        knowingly violates any provision of this section shall be 
        banned from future employment with any bank holding company or 
        issuer or publicly traded entity.
            ``(3) Civil monetary penalty.--Any financial company that 
        violates, and any individual who participates in a violation 
        of, any provision of this section, or any regulation or order 
        issued under this section, shall forfeit all revenues 
        associated with such a violation and pay an additional civil 
        penalty of not more than $25,000 for each day during which the 
        violation continues.''.
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