Washington, D.C., September 14, 2025 — In a pivotal move reshaping climate policy oversight, the U.S. Treasury-led regulatory body has voted to dissolve two major committees tasked with analyzing financial risks posed by climate change. This signals a shift in regulatory priorities under the current administration.
The Financial Stability Oversight Council (FSOC), which is chaired by Treasury Secretary Scott Bessent, officially rescinded the charters for both the Climate-Related Financial Risk Committee and its Advisory Committee in a unanimous voice vote during a public session.
Policy Shift: Back to Basics Approach
These committees were initially established under Janet Yellen’s leadership as part of the Biden administration’s efforts to integrate climate change into financial regulation. Yellen had emphasized how wildfires, severe storms, and other climate events pose systemic threats to financial stability.
Secretary Bessent defended the dismantling as part of a “back to basics” regulatory philosophy. According to him, it removes regulatory burdens and eases capital requirements for banks and similar financial institutions in order to spur economic growth.
He added that eliminating these committees allows FSOC to refocus on its core missions: preserving financial stability, ensuring safety and soundness in financial institutions, and protecting consumers.
Reactions and Broader Implications
The decision has drawn sharp criticism from consumer advocates and environmental groups. Tracey Lewis, senior policy counsel at Public Citizen, warned that losing these advisory bodies could undermine oversight of climate-related risks to housing, insurance, homeowners, and other sectors central to financial security.
This step is seen as part of a larger effort to unwind several of the Biden administration’s climate and energy regulations. Earlier moves include reducing federal support for clean energy and lessening regulation of fossil fuel production.
What Comes Next
FSOC has indicated it will also review existing guidance for designating non-bank institutions as systemically important financial institutions, which could lead to changes in how they’re regulated.
The shift signals an evolving regulatory landscape in which financial regulators may deprioritize climate-focused committees in favor of traditional oversight frameworks.