H.R. 10746 — Fossil Free Finance Act of 2026

This section requires bank holding companies with at least $50 billion in total consolidated assets to submit an emission reduction plan to the Federal Reserve Board within 210 days of enactment and every two years thereafter. Each plan must set a baseline year no later than two years after enactment, achieve zero financial sector emissions by January 1, 2050, reduce emissions 50 percent below baseline by January 1, 2035, and end financing or facilitation of new or expanded fossil fuel projects within 60 days of enactment.

This section adds the extent to which a company makes a nontrivial contribution to financial sector emissions as a factor the Financial Stability Oversight Council must consider when determining whether to subject a U.S. or foreign nonbank financial company to supervision by the Board of Governors. It also requires prudential standards to include divestiture of financial sector emissions and emissions reduction plans.

This section directs the Board of Governors of the Federal Reserve System to submit to Congress an initial report within 180 days that identifies current U.S. financial sector emissions levels, trends, covered bank holding company commitments, emissions needed to meet 1.5°C targets, regulatory gaps, data challenges, equitable transition needs for workers and communities, affected groups and economic impacts, and mitigation options including use of the Community Reinvestment Act and establishment of a public investment bank. It requires follow-up reports at least every two years on progress toward targets and equitable transition, with recommendations for congressional and agency assistance, and authorizes collection of data from bank holding companies.