HR 10746: Fossil Free Finance Act of 2026

HR 10746 in plain English: The Fossil Free Finance Act of 2026 would impose new requirements on large bank holding companies—those with at least $50 billion in total consolidated assets—related to financing of fossil fuels and, separately, commodities linked to deforestation risk.

Stated purpose

The bill aims to reduce greenhouse gas emissions tied to the activities of large banks and financial companies by requiring them to align their lending and investment portfolios with science-based emissions targets, in order to protect financial stability.

Key points

• Applies to bank holding companies with at least $50 billion in total consolidated assets
• Addresses bank financing tied to fossil fuels and deforestation risk commodities

Arguments supporters make

• Large banks financing fossil fuels are exposed to long-term climate-related financial risks, so requiring them to cut those emissions protects the broader financial system from future instability.
• Requiring banks to align with science-based targets pushes private capital toward clean energy, accelerating a transition that the market alone may not drive fast enough.
• Making financial sector emissions transparent and enforceable closes a major gap, since the biggest driver of a bank's carbon footprint is often what it funds, not its own operations.

Arguments opponents make

• Restricting bank financing for fossil fuels could raise energy costs and reduce credit access for communities and industries that still depend heavily on oil, gas, and coal.
• Tying bank regulation to emissions targets mixes financial safety-and-soundness oversight with climate policy, potentially distorting lending decisions and creating unintended economic risks.
• The 15 percent revenue threshold for defining fossil fuel companies could sweep in businesses with only a minor connection to fossil fuels, creating broad and unpredictable compliance burdens for banks.

Tradeoffs

Reducing financial sector support for fossil fuels may lower long-term climate-related financial risk, but could restrict credit and raise costs for energy producers and dependent communities in the near term. The bill uses banking regulation as a climate tool, creating tension between financial regulators' traditional safety-and-soundness mission and broader environmental policy goals.

Current status in Congress: In committee.

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