Federal regulators unveil climate risk rules for banks, aiming to aid underserved communities amid political opposition.

Federal banking regulators have announced two new regulatory actions aimed at addressing the financial threats of climate change, including in underserved communities. The final rule includes a provision that incentivizes banks to help “redlined” communities weather climate-fueled disasters, potentially leading to billions in investment in infrastructure improvements. New guidance also sets regulatory expectations for large banks’ exposure to climate-related financial risk. The move comes amid fierce Republican opposition to federal efforts to address climate change. The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. have also finalized long-awaited guidance to support large lenders’ efforts to account for climate risk. However, critics argue that the rules fail to limit banks’ contributions to rising global temperatures.