The Office of the Comptroller of the Currency (OCC) is taking aim at another potential source of state regulatory interference with federally chartered financial institutions. In an October 29, 2026 letter to the Chair of the California Air Resources Board (CARB), Comptroller of the Currency Jonathan Gould urged California to exempt national banks and federal savings associations from two California climate-disclosure statutes. The OCC contends that applying these laws to federally chartered institutions would create substantial compliance burdens, interfere with the OCC’s supervisory responsibilities, disrupt banking relationships, and raise significant federal preemption and constitutional concerns. This builds on the OCC’s rescission on October 16, 2025 of its own climate-related financial risk management guidance in which it stated: “The agencies do not believe principles for the management of climate-related financial risk are necessary and are concerned that such principles could distract from the management of other potential risks identified and addressed by financial institutions’ existing risk management processes and the agencies’ other risk management rules and guidance.” OCC Bulletin 2025-34 Risk Management Rescission of Principles for Climate-Related Financial Risk Management for Large Financial Institutions.
The letter is important not only because of its implications for federally chartered institutions doing business in California, but also because it reflects the OCC’s broader willingness under Comptroller Gould to challenge state laws that the agency believes interfere with the exercise of federally authorized banking powers.
The California Laws at Issue
The OCC’s letter addresses two California statutes:
- SB 253, the Climate Corporate Data Accountability Act. This law requires entities with annual revenues exceeding $1 billion that do business in California to annually disclose their greenhouse gas emissions, including Scope 1, Scope 2, and Scope 3 emissions.
CARB is responsible for implementing both statutes. The OCC notes that CARB has deferred further action on SB 261 pending resolution of litigation challenging that law, but continues to develop implementing regulations for SB 253.
Although the statutes contain revenue thresholds, the OCC believes those thresholds are insufficiently tailored to the size, risk profile, and complexity of financial institutions. Consequently, the laws could reach smaller community banks that the OCC believes should not be subject to these requirements.
The OCC’s Objections
The OCC identifies four principal concerns with applying the California statutes to national banks and federal savings associations.
1. Interference with the OCC’s safety-and-soundness responsibilities
The OCC argues that the disclosure requirements conflict with its responsibility to ensure that federally chartered banks operate in a safe and sound manner.
According to the OCC, federal banking supervision appropriately focuses on material financial risks that could threaten an institution’s safety and soundness. California’s disclosure requirements, by contrast, would impose substantial compliance obligations without regard to whether the underlying climate-related matters present material financial risks to the particular institution.
The OCC maintains that requiring banks to devote significant resources to these obligations could distract management from more important risks and undermine the agency’s risk-focused supervisory approach.
The OCC also points to its recent regulatory actions emphasizing material financial risks rather than imposing supervisory expectations that are disproportionate to the risks presented by individual institutions.
2. Disproportionate compliance burdens, particularly for community banks
The OCC’s second objection is that California’s revenue thresholds do not appropriately account for the differences between large, complex financial institutions and smaller community banks.
The agency emphasizes that Congress and the OCC have historically recognized the importance of tailoring regulatory requirements to an institution’s size, risk profile, and complexity. In the OCC’s view, the California statutes depart from that approach by potentially subjecting smaller, less complex banks to substantial reporting and compliance requirements.
This concern is particularly significant because community banks generally have fewer resources to devote to regulatory compliance than their larger competitors.
3. Potential harm to California consumers and disruption of banking relationships
The OCC also argues that the disclosure requirements could produce consequences contrary to California’s interests.
Banks that can avoid the requirements by limiting or discontinuing their California operations may elect to do so. Smaller banks may be particularly likely to withdraw. Banks that cannot withdraw, including California-headquartered institutions, could face substantial compliance costs that place them at a competitive disadvantage.
The OCC predicts that these consequences could reduce competition, increase the cost of financial services, and limit access to banking services for California consumers and businesses.
The letter raises an additional concern involving customer relationships and confidentiality. According to the OCC, complying with the disclosure statutes could require banks to collect detailed information from customers concerning their greenhouse gas emissions and financial standing. Customers may consider these requests intrusive, decline to provide the requested information, or terminate their relationships with banks seeking it.
Importantly, the OCC believes these consequences could extend beyond California because of the breadth of the statutes and the potential disruption of relationships between banks and customers located elsewhere.
4. Federal preemption and the OCC’s exclusive visitorial authority
The OCC’s most consequential objection is its contention that applying the California statutes to federally chartered banks may violate the federal banking laws and the Supremacy Clause.
The letter emphasizes that national banks operate under a comprehensive federal regulatory framework designed to permit them to conduct banking activities nationwide without being subjected to a patchwork of inconsistent state requirements.
The OCC relies on the familiar standard articulated by the Supreme Court in Barnett Bank of Marion County, N.A. v. Nelson, under which state laws are preempted when they prevent or significantly interfere with the exercise of national bank powers. The OCC also cites the Supreme Court’s recognition in Watters v. Wachovia Bank, N.A. and Cuomo v. Clearing House Association that federal law protects national banks from conflicting state supervisory regimes.
The OCC’s argument goes beyond ordinary preemption, however. It also invokes its exclusive visitorial authority over national banks under 12 U.S.C. § 484. That provision generally prohibits states from exercising visitorial authority over national banks, subject to specified exceptions. The OCC maintains that this federal authority generally prevents states from requiring national banks to produce information.
The OCC views federal preemption and exclusive visitorial authority as essential components of the dual banking system. These protections allow federally chartered institutions to operate under uniform federal standards rather than face potentially duplicative or conflicting state regulatory regimes.
The OCC cites 12 U.S.C. § 1465 as well in addressing the application of the federal preemption framework to federal savings associations. That provision, added to the Home Owners Loan Act by the Dodd-Frank Act, states the federal savings associations shall enjoy the same power as national banks insofar as preemption of state laws is concerned and the same immunity against state agencies exercising visitorial powers is concerned.
The Comptroller concludes that applying the California disclosure requirements to federally chartered institutions may well conflict with this framework.
What Happens Next?
The OCC does not purport to have issued a formal determination that SB 253 and SB 261 are preempted as applied to national banks and federal savings associations. Instead, it asks CARB to exempt those institutions from the statutes or otherwise clarify that they are not required to comply.
The letter also makes clear that the OCC intends to monitor CARB’s implementation of the statutes and evaluate whether further action is necessary to provide federally chartered institutions with certainty concerning their obligations.
If CARB declines to provide the requested clarification, the OCC may have to decide whether to pursue a more formal legal or regulatory response.
Takeaways
The OCC’s letter is another indication that the agency intends to take an active role in protecting the ability of federally chartered financial institutions to operate under a uniform federal regulatory framework.
Several aspects deserve attention.
First, the OCC is not limiting its preemption concerns to state laws that directly regulate traditional banking activities, such as lending, deposit-taking, and interest rates. It is also challenging state requirements that may indirectly affect bank operations by imposing extensive information-gathering and public-disclosure obligations.
Second, the OCC’s reliance on its exclusive visitorial authority is particularly interesting. The agency is asserting that federal law may prevent states not only from supervising national banks, but also from requiring them to produce information. The precise reach of that authority when a state imposes generally applicable public-disclosure obligations, rather than conducting an examination or investigation, could present an important legal question.
Third, the OCC’s position raises questions about the extent to which federally chartered banks can resist state requirements that are not expressly directed at banking activities but nevertheless impose substantial operational and compliance obligations on them. The fact that a state law applies to businesses generally does not necessarily resolve whether its application to a national bank significantly interferes with the exercise of federally authorized banking powers.
Finally, the letter should be viewed in the context of the OCC’s broader efforts to reinforce federal banking authority and limit what it regards as inappropriate state interference. Whether CARB accepts the OCC’s request, and whether the OCC ultimately takes additional action, will be worth watching.
For national banks and federal savings associations, the letter provides an important indication of the OCC’s willingness to defend the federal banking framework against state regulatory initiatives that it believes impose conflicting or disproportionate obligations.