Fossil Free Finance Act of 2026

Bank holding companies with at least $50 billion in consolidated assets would submit plans to reduce emissions tied to their financing and financial services. Plans would target a 50 percent reduction from a selected baseline by January 1, 2035, and zero financial sector emissions by January 1, 2050; carbon offsets could not count toward the targets.

Plans would call for stopping new or expanded fossil fuel projects within 60 days of enactment, immediately ending thermal coal financing and facilitation, and ending all fossil fuel financing and facilitation by January 1, 2035. Plans would also eliminate financing and facilitation of deforestation-risk commodities.

Plans would prioritize withdrawing funding from companies and projects that disproportionately harm low-income and minority communities, lending for severance and worker retraining, and closer review of effects on biodiversity and communities. Plans could use proven negative-emissions technologies only if they do not negatively affect low-income, minority, or Indigenous communities.

The bill would add a company’s contribution to financial sector emissions as a factor in decisions about supervising certain nonbank financial companies. It would also add emissions divestiture and emissions-reduction plans to financial oversight standards.

The Federal Reserve would review plans and issue submission rules. If a covered bank holding company failed to submit or meet a plan, the Board would apply penalties and could require asset sales; the FDIC could take action against the insured institution it controls, including terminating its insured status. The Federal Reserve would also report to Congress on emissions, progress, data challenges, and transition impacts.