OCC Challenges California’s Climate Disclosure Laws Citing Federal Preemption
OCC filed a letter opposing California’s SB 253 and SB 261 climate disclosure laws.
Why it matters: This challenge raises questions about how federally chartered banks must comply with state environmental rules and the balance of power between state and federal oversight.
- OCC’s October 29, 2026 letter to California Air Resources Board contests SB 253 and SB 261 climate laws.
- SB 253 requires $1B+ revenue firms to disclose annual greenhouse gas emissions including Scope 1, 2, and 3.
- SB 261 mandates $500M+ revenue firms to report biennially on climate-related financial risks and mitigation.
- OCC cites federal preemption, potential harm to banks, competition, and constitutional concerns under Supremacy Clause.
On October 29, 2026, the Office of the Comptroller of the Currency (OCC) sent a formal letter to the California Air Resources Board (CARB) expressing significant legal concerns over California's climate disclosure laws—Senate Bill 253 (SB 253) and Senate Bill 261 (SB 261).
SB 253 requires companies doing business in California with annual revenues exceeding $1 billion to annually disclose their greenhouse gas emissions, covering Scope 1, Scope 2, and Scope 3 emissions. SB 261 mandates entities with revenues over $500 million to publish biennial reports outlining climate-related financial risks and their mitigation efforts. These laws aim to increase corporate climate transparency within the state.
The OCC argues these requirements, applied to federally chartered banks, conflict with federal regulations and supervision of such institutions. According to the OCC, forcing compliance would impose undue burdens, especially on smaller banks, possibly degrade customer relationships, and disrupt access to financial services. "The disclosure laws run directly counter to the OCC's regulation and supervision of federally chartered banks," the agency stated.
The OCC further asserts that the application of these state laws violates the constitutional Supremacy Clause and interferes with the dual banking system's foundational concepts of federal preemption and visitation authority. It warned that such state mandates could reduce competition and raise costs, ultimately harming Californians and Main Street businesses.
Through its letter, the OCC urged CARB to clarify that national banks and federal savings associations are exempt from California’s climate disclosure laws. The agency emphasized its commitment to maintaining a uniform federal regulatory framework for federally chartered financial institutions nationwide and indicated it will monitor and respond to similar state laws elsewhere.
By the numbers:
- $1 billion — Revenue threshold for entities subject to SB 253 greenhouse gas disclosures.
- $500 million — Revenue threshold for entities subject to SB 261 climate-related financial risk reporting.
- October 29, 2026 — Date OCC submitted its letter to the California Air Resources Board.