,,ii #aagth ,,congress #ast ,session ,s4 #cafg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,november #d1 #bjba,mr4 ,markey 7for himself and ,mr4 ,merkley7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to amend the ,bank ,holding ,company ,act of #aief and the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act to require disclosure of certain financed emissions1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,fossil ,free ,finance ,act4 #b4 ,alignment of financed emissions with science-based targets ,the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda et seq47 is amended by adding at the end the following3 #ae4 ,alignment of financed emissions with science-based targets 7a7 ,definitions ,in this section3 7#a7 ,covered bank holding company ,the term covered bank holding company means a bank holding company with total consolidated assets equal to or greater than #ej1jjj1jjj1jjj4 7#b7 ,deforestation risk commodities ,the term deforestation risk commodities means globally traded goods and raw materials-- 7,a7 that originate from natural forest ecosystems1 either-- 7i7 directly from within forest areas2 or 7ii7 from areas previously under forest cover2 and 7,b7 the extraction or production of which contributes significantly to the conversion of natural forest to agriculture1 tree plantation1 or other non-forest land use4 7#c7 ,financed emissions ,the term financed emissions means1 with respect to a covered bank holding company1 and any nonbank financial company1 the share of the emissions of such company attributable to investment in1 or the providing of financial services to1 a company or project of a company1 including-- 7,a7 investments in a debt or equity investment in such another company or the assets of such another company2 7,b7 project finance investment2 7,c7 underwriting2 7,d7 syndication or securitization of loans or asset-backed securities2 7,e7 derivative transactions related to financing or hedging2 and 7,f7 market making4 7#d7 ,fossil fuel financing ,the term fossil fuel financing means1 with respect to a covered bank holding company1 investment in-- 7,a7 a company that derives #ae percent or more of revenue from exploration1 extraction1 processing1 exporting1 transporting1 and any other significant action with respect to oil1 natural gas1 coal1 or any byproduct thereof2 or 7,b7 a fossil fuel project4 7#e7 ,fossil fuel project ,the term fossil fuel project means a project intended to-- 7,a7 facilitate or expand exploration1 extraction1 processing1 exporting1 transporting1 or any other significant action with respect to oil1 natural gas1 coal2 or 7,b7 construct any infrastructure related to the activities in subparagraph 7,a71 such as wells1 pipelines1 terminals1 refineries1 or utility-sale generation facility4 7#f7 ,natural forest ,the term natural forest means a natural arboreal ecosystem that-- 7,a7 has a species composition a significant percentage of which is native species2 and 7,b7 contains a tree canopy cover of more than #aj percent over an area of not less than #j4e hectares4 7#g7 ,new or expanded fossil fuel project ,the term new or expanded fossil fuel project means a fossil fuel project that would increase the-- 7,a7 level of proven or developable oil1 natural gas or coal reserves2 7,b7 midstream throughput of pipelines1 terminals or refineries2 or 7,c7 combustion of oil1 natural gas or coal for utility-scale electricity generation4 7b7 ,requirements ,not later than #baj days after the date of the enactment of this subsection1 and not less than once every #b years thereafter1 a covered bank holding company shall-- 7#a7 submit to the ,board an emission reduction plan for reducing emissions in accordance with this section2 and 7#b7 if the plan is accepted under subsection 7d71 implement such plan4 7c7 ,elements of plan ,each plan required under subsection 7b77#a7-- 7#a7 shall include-- 7,a7 a plan for the covered bank holding company to reach zero financed emissions by ,january #a1 #bjej2 7,b7 a plan to reduce the financed emissions of the bank holding company by #ej percent by ,january #a1 #bjcj2 7,c7 a plan to discontinue new or expanded fossil fuel projects not later than ,january #a1 #bjbc2 7,d7 a plan for the covered bank holding company to discontinue thermal coal financing by ,january #a1 #bjbe2 7,e7 a plan for the covered bank holding company to discontinue fossil fuel financing by ,january #a1 #bjcj2 and 7,f7 a plan for the covered bank holding company to eliminate financing of deforestation risk commodities28 7,g7 such other requirements as the ,board determines is necessary to protect the financial stability of the ,united ,states2 7#b7 may not include carbon offsets2 7#c7 may include proven negative carbon emission technologies to meet the requirements under paragraph 7#a77;,a7 alone1 provided that these projects do not negatively impact low-income1 minority1 or indigenous communities2 7#d7 shall prioritize-- 7,a7 the covered bank holding company withdrawing funding from companies and projects that have a disproportionately negative impact on health and well-being of low-income and minority communities2 and 7,b7 lending to companies for purposes of carrying out severance1 retraining1 and other benefits to workers impacted by the transition to zero financed emissions4 7d7 ,consideration of plan ,not later than #f months after receiving a plan under subsection 7b77#a71 the ,board shall-- 7#a7 accept the plan2 or 7#b7 reject the plan if it does not align with science-based targets without the use of offsets or unproven carbon emission reduction technologies and require the covered bank holding company to revise such plan in accordance with the suggestions of the ,board4 7e7 ,penalties ,in the case of a covered bank holding company that does not submit a plan in accordance with this section or meet the requirements set out in such a plan-- 7#a7 the ,board shall-- 7,a7 apply the penalties under section #h1 through procedures prescribed by the ,board by rule2 7,b7 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 plan2 and 7,c7 notify the ,board of ,directors of the ,federal ,deposit ,insurance ,corporation of the noncompliance of such covered bank holding company2 and 7#b7 the ,board of ,directors of the ,federal ,deposit ,insurance ,corporation may1 with respect to any covered bank holding company described in paragraph 7#b77;,b7 or a subsidiary of such bank holding company that contributes to the failure of such covered bank holding company to comply with this section-- 7,a7 terminate insurance under section #h7;a77#b7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;a77#b772 and 7,b7 carry out any other corrective action available under section #ch of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahcao74 7f7 ,regulations ,not later than #ahj days after the date of the enactment of this section1 the ,board shall issue regulations establishing the format and timing for submission of the plans required under this section4 4 #c4 ,contribution to climate change included in fsoc designation 7a7 ,authority ,to require supervision and regulation of certain nonbank financial companies ,section #aac of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecbc7 is amended-- 7#a7 in subsection 7a77#b7-- 7,a7 in subparagraph 7,j71 by striking and at the end2 7,b7 by redesignating subparagraph 7,k7 as subparagraph 7,l72 and 7,c7 by inserting after subparagraph 7,j7 the following3 7,k7 the extent to which the company makes a non-trivial contribution to the financed emissions 7as defined in section #ae of the ,bank ,holding ,company ,act of #aief7 of the financial system of the ,united ,states2 2 and 7#b7 in subsection 7b77#b7-- 7,a7 in subparagraph 7,j71 by striking and at the end2 7,b7 by redesignating subparagraph 7,k7 as subparagraph 7,l72 and 7,c7 by inserting after subparagraph 7,j7 the following3 7,k7 the extent to which the company makes a non-trivial contribution to the financed emissions 7as defined in section #ae of the ,bank ,holding ,company ,act of #aief7 of the financial system of the ,united ,states2 and 4 7b7 ,enhanced supervision and prudential standards for nonbank financial companies supervised by the board of governors and certain bank holding companies 7#a7 ,development of prudential standards ,section #aae7;b77#a7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecbe7;b77#a77 is amended-- 7,a7 in subparagraph 7,h71 by striking and2 7,b7 in subparagraph 7,i71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following3 7,j7 divestiture of financed emissions 7as defined in section #ae of the ,bank ,holding ,company ,act of #aief74 4 7#b7 ,required standards ,section #afe7;b77#a77;,a7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecfe7;b77#a77;,a77 is amended-- 7,a7 in clause 7iv71 by striking and2 7,b7 in clause 7v71 by striking the period and inserting 2 and2 and 7,c7 by adding at the end the following3 7vi7 emissions reduction plans in accordance with section #ae of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda et seq474 4 #d4 ,reports 7a7 ,definitions ,in this section3 7#a7 ,covered bank holding company ,the term covered bank holding company means a bank holding company with total consolidated assets equal to or greater than #ej1jjj1jjj1jjj4 7#b7 ,financed emissions ,the term financed emissions means1 with respect to a covered bank holding company1 and any nonbank financial company1 the share of the emissions of such company attributable to investment in1 or the providing of financial services to1 a company or project of a company1 including-- 7,a7 investments in a debt or equity investment in such another company or the assets of such another company2 7,b7 project finance investment2 7,c7 underwriting2 7,d7 syndication or securitization of loans or asset-backed securities2 7,e7 derivative transactions related to financing or hedging2 and 7,f7 market making4 7#c7 ,science-based emissions targets ,the term science-based emissions targets means reduction in greenhouse gas emissions consistent with preventing an increase in global average temperature of greater than or equal to #a4e degrees ,celsius compared to pre-industrial levels4 7b7 ,initial report ,not later than #ahj days after the date of the enactment of this subsection1 the ,board of ,governors of the ,federal ,reserve ,system shall submit a report to ,congress that-- 7#a7 identifies current level of financed emissions in the financial system of the ,united ,states2 7#b7 includes an analysis of trends in financed emissions reductions2 7#c7 includes a summary of the commitments of covered bank holding companies to reduce financed emissions2 7#d7 estimates the financed emissions in the financial system of the ,united ,states needed to meet science-based emissions targets2 7#e7 identifies regulatory gaps in reducing financed emissions that cannot be addressed with authorities of the ,board and recommendations for addressing such gaps2 7#f7 identifies data quality challenges for assessing financed emissions and recommendations to address those challenges2 7#g7 identifies the equitable transition needs for workers and communities that will be impacted by a shift to a zero financed emissions economy2 7#h7 analyzes-- 7,a7 the number and groups of people affected by a transition to zero financed emissions2 and 7,b7 the economic impact of such a transition with respect to such groups2 and 7#i7 identifies regulatory and legislative options for mitigating the economic impacts described in paragraph 7#h77;,b71 including-- 7,a7 the use of existing authorities1 including the ,community ,reinvestment ,act of #aigg 7#ab ,u4,s4,c4 #bija et seq47 and emergency lending powers under section #ac of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #cdb72 and 7,b7 the establishment of a public investment bank to finance investment in an equitable transition to a zero financed emissions economy4 7c7 ,periodic report ,not later than #ahj days after the date of the enactment of this subsection and not less than once every #b years thereafter1 the ,board of ,governors of the ,federal ,reserve ,system shall submit a report to ,congress that includes-- 7#a7 an analysis of the progress against aligning with financed emissions targets2 7#b7 the estimates described in subsection 7b77#d72 and 7#c7 an analysis of the progress made in the preceding #b years towards an equitable transition to a zero financed emissions economy2 and 7#d7 recommendations with respect to assistance ,congress and other ,federal agencies may provide to-- 7,a7 facilitate a reduction of financed emissions2 and 7,b7 support an equitable transition to a zero financed emissions economy4 7d7 ,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 reports under this section4