Budget Bill an Assault on CFPB and Much Else

The Trump administration has taken $18 billion out of your pocket by dismantling the Consumer Financial Protection Bureau (CFPB) and rolling back safeguards against scams, ripoffs, and junk fees. And it’ll only get worse now that the majority in Congress has used the power of the purse to squeeze the life out of the CFPB.

This big, brutal bill is an abomination for many reasons beyond CFPB. It will kick an estimated 12 to 17 million people off Medicaid, 5 million people off nutrition assistance, and drive up student debt. Republicans packed a myriad of other destructive measures into the bill, which passed over bipartisan opposition in the Senate by 51-50 (VP Vance broke the tie) and then by a razor-thin margin the House. This legislation is bad, bad news for everyone who isn’t already rich. Said AFR Co-Executive Director Ericka Taylor following House passage:

The giveaways to private equity firms subsidize predatory and extractive practices that harm workers, families, and communities. At the same time, the big, brutal bill dismantles critical agencies like the Consumer Financial Protection Bureau, making people more vulnerable to scams, rip-offs, and junk fees.

Advocates supported using the bill to make Wall Street pay its fair share and tax private equity landlords who drive the cost of housing higher, with the revenue generated by closing these tax loopholes potentially eliminating the need to gut vital programs and services. But the congressional majority stood firm on their Wall Street giveaway legislation.

The Republican majority used the budget reconciliation process to try to zero out the CFPB’s budget. The Senate’s referee — the parliamentarian — threw out that attempt, but allowed what became the final legislation to slash the CFPB’s statutory funding cap by nearly half, an effort opposed by nearly 200 public interest groups. Senator Warren led an effort on the Senate floor to strip out this harmful provision, but it failed on party lines.

The dismantling of CFPB from within is already taking a terrible toll.

An analysis by the Student Borrower Protection Center and Consumer Federation of America examines the higher fees and lost compensation that corporations can inflict on consumers with the loss of critical CFPB functions. By January 2025, the CFPB had, over its lifetime, saved everyday people nearly $20 billion. But Trump’s monthslong slash-and-burn assault against the agency, spearheaded from the outside by billionaire-oligarch Elon Musk and on the inside by corporate apologist Russell Vought, has torn gaping holes in the fabric of consumer protection.

More recently, Cara Petersen, one of the CFPB’s top enforcement officials, resigned, saying that the Trump administration has “no intention to enforce the law in any meaningful way” — the same laws that protect everyday people from financial predators. Indeed, Vought’s CFPB refuses to use the $700 million it has in reserves to protect consumers. Already, industry voices have swooped in to call for the agency to drop cases and undo settlements it struck in its more productive years. This week, the CFPB abandoned a settlement with Navy Federal Credit Union, a gross hypocrisy given its claims of working on behalf of “servicemen and veterans.”

AFR has opposed any attempt to shred the CFPB’s once-highly effective playbook. That includes a recent proposal to rescind its list of repeat offenders, and another that would make the agency’s orders and decisions about nonbank supervision confidential. Wrote AFR:

Rescinding these amendments and proposing blanket confidentiality for all final decisions and orders in risk-designation proceedings will further strip away much needed transparency for some of the riskiest and least regulated nonbank financial products that are offered in the financial marketplace.

These developments, in the executive branch and in Congress, have the potential to start a “race to the bottom” in consumer financial protection, writes Suffolk University’s Kathleen Engel. And in a race like that, everyone — the everyday people that are beholden to financial institutions, as well as the financial system itself — loses.

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BANKING AND FINANCIAL STABILITY: Capital Rules – Private Finance, Public Power – Biased. – Stressed.
CONSUMER: Buy Now, Pain Later. – Paycheck Payday Loans. – Navy Federal Case Abandoned.
CAPITAL MARKETS: Paid How Much? – Your Retirement.
PRIVATE MARKETS: PE’s Tax Loophole. – PE in the Shadows. – PE in Public Service. – PE and Union-Busting. – Beware Private Funds… – Financial Media on PE and Mom and Pop Investors. – …And Private Credit. – Rewarded for Making Things Worse. – PE and Healthcare. – PE Unschooled. – PE and Number Crunchers.
CRYPTO: Unstablecoins. – Ripple. – Trump’s Crypto. – Crypto Crime. – Blockchain Stocks? – Thiel
HOUSING: Crypto in the House? – The Insurance Crisis. – Have HOPE. – Last Resort. – Pushing Back. – A Bad Budget for Housing. – Nebraska. – Don’t Pay Off a Racist Mortgage Lender.
CLIMATE AND FINANCE: Private Equity, Public Harm. – False Solutions. – Climate Catastrophe and Your Cash. – Banks and Fossil Fuels. – Not Enough Info.

Feedback? Reach us at afrnews@ourfinancialsecurity.org

BANKING AND FINANCIAL STABILITY

Capital Rules.

Trump-appointed regulators at the Fed, FDIC and OCC announced plans to scale back the enhanced supplementary leverage ratio (eSLR), a provision born in the wake of the 2008 financial crisis that held the biggest and most important banks to a higher standard of systemic safety than their smaller peers. The eSLR required banks that were considered “global systemically important bank holding companies” (GSIBs) to hold more quality capital as a cushion against shocks than standard banks.

Private Finance, Public Power.

The University of Pennsylvania’s Peter Conti-Brown and the University of Glasgow’s Sean Vanatta unveiled a new book, Private Finance, Public Power, which dives into the quirks, quarrels and quandaries of two centuries of bank supervision in the United States. The book explores how bankers, politicians, bureaucrats and others all come together to sway how bank watchdogs try to keep risk from getting out of control – and how, sometimes, they don’t.

Writes Yale’s Steven Kelly, alluding to the arrival of Trump-appointed regulators: “It's a story of competing theories of capitalism, banking and risk management that is essential reading for the modern moment. As a wave of new bank regulators descends on Washington less than two years after three historic bank failures, bank supervision is at a pivotal moment.”

Biased.

The Office of the Comptroller of the Currency (OCC) said it would stop examining for disparate impact (unintentional bias) during reviews of financial institutions’ lending practices.

Stressed.

As the Fed pulls back from enforcing strong stress tests that ensure economic stability, U.S. banks have announced massive shareholder payouts. Banks often claim that regulations and supervision inhibit their lending to the real economy, but their actions tell more truth than their words.

CONSUMER

Buy Now, Pain Later.

Affirm, a buy-now-pay-later (BNPL) company, allowed one Pennsylvania woman to rack up $30,000 in debt on its platform. She has no idea how she could have even been approved for so much. BNPL services allow their users to split up big purchases into smaller installments. They’re especially popular among families making less than $50,000 a year. And consumer advocates are concerned that it’s causing people to pile on mass amounts of debt that they can’t pay off. One study found that some BNPL users were overspending and started to show signs of financial distress; meanwhile, more people are turning to it to finance basic necessities, like groceries. Some BNPL providers, like Klarna, saw their credit losses spike earlier this year because of late or missed payments.

At the same time that Vought’s CFPB has walked back previous plans to treat BNPL like credit card companies, its Office of Research contradicts one of the agency’s earlier findings. A new paper published this month says that first-time BNPL use doesn’t affect the ability of borrowers to pay off non-BNPL debt. But in January, before the handoff to the Trump administration, CFPB research found heavy use of BNPL among people with high existing credit balances and multiple pay-in-four loans, and nearly two-thirds of these loans went to people with lower credit scores.

While Trump’s CFPB has rescinded the prior BNPL interpretive rule that applied many credit card rights (including disclosure requirements), a recent BNPL issue brief from the National Consumer Law Center helps users understand their rights, and reminds us that the withdrawal of that rule carries “little legal significance, as the CFPB did not state that the prior interpretation was wrong, and even if it had, the CFPB did not provide detailed or persuasive reasoning refuting the prior interpretation.”

Paycheck Payday Loans.

Maine’s Bureau of Consumer Credit Protection says that earned wage access (EWA) products, which allow workers to access parts of their paycheck earlier — sometimes for enough in fees and coerced tips to translate to triple-digit interest rates — are loans. The agency’s legal analysis found that they qualify as credit transactions and that EWA providers may be supervised lenders or creditors, meaning they’re subject to the credit laws in the state’s Consumer Credit Code.

Elsewhere: Even though North Dakota expanded its licensing law to include different types of alternative finance, one law firm implies that it may not include earned wage access.

Navy Federal Case Abandoned.

In 2024, the CFPB ordered Navy Federal Credit Union to pay more than $95 million for springing illegal overdraft fees on their customers, including active servicemembers and veterans. On July 1, Vought’s CFPB walked back the penalty and restitution.

CAPITAL MARKETS

Paid How Much?

AFREF and five other organizations spoke out against the apparent laying of the groundwork by the SEC — through a roundtable dominated by corporate representatives — to water down disclosures public corporations have to make about how they pay their CEOs and other top executives. Over the last few decades, executive pay has exploded, and it’s critical for investors to have details about these outrageous pay packages so they can make informed decisions about where to invest their money and how to vote in corporate elections.

Your Retirement.

AFR, labor unions, investors, and other public interest organizations expressed opposition to H.R. 2988, a bill out of the House Education and Workforce Committee that would undermine the safety of people’s retirement savings. The bill would make amendments to the Employee Retirement Income Security Act (ERISA) that would chill how fiduciaries could consider different financial risks and opportunities, undermine smart investments that would give workers benefits in addition to financial returns, silence workers’ voices in governing the companies they’re invested in, and stymie efforts to increase value by diversifying retirement plan service providers.

PRIVATE MARKETS

PE’s Tax Loophole.

AFR is urging Congress to clamp down on financial loopholes that favor the ultra‑wealthy while gutting critical public programs. In a letter to the Senate, AFR warned that the budget reconciliation legislation “prioritizes massive tax cuts for the ultra‑wealthy while cutting critical programs like healthcare, nutrition assistance, and basic support for working families,” calling it “the most regressive legislative package in decades.” The letter highlighted ten targeted reforms, including raising the stock buyback surcharge, closing the carried interest loophole, and reversing generous business interest deductions, to shift wealth from Wall Street back to the middle class. The proposals in the letter were not included in the final version of the bill passed out of the Senate or the House.

PE in the Shadows.

AFR’s Dustin Duong explores how private equity used a network of fossil fuel and housing companies to fight its carried interest fight, preserving a loophole that lets the executives at the top of these megafirms cut their tax burdens in half. Private equity firms used a network of companies that they own, financially support, or are associated with to project an artificial image of homegrown resistance to closing the carried interest tax loophole. In Texas and Louisiana, PE has enlisted oil and gas producers to fight its fight. And more widely across the country, they have brought in corporate landlords to do the same.

AFR argues that preserving the loophole allows private equity barons to continue extracting wealth at the expense of working families, while enjoying special favors hidden from public view.

PE in Public Service.

The SEC tapped Brian Daly, an attorney that has worked with private equity firms and hedge funds, to head up its Division of Investment Management, putting an ally of risky money managers in charge of the rules governing them.

PE and Union-Busting.

Three years after it surfaced in 2022 that a company backed by private equity megafirm Blackstone was hiring immigrant kids to clean up meatpacking plants, New York Comptroller Tom DiNapoli has “has urged at least three private equity firms responsible for investing billions of state pension dollars to stop anti-union activities among their portfolio companies,” according to New York Focus.

Beware Private Funds…

Credit rating firm Moody’s is ringing the alarm about the dangers of retail access to private funds because they are too risky, opaque, and illiquid. If they were to invest in PE, small investors wouldn’t be able to easily sell their investments to make ends meet during economic hardship, would have few choices in the marketplace to choose from, and may only get the bottom-of-the-barrel deals in which fund managers couldn’t get bigger players to stay. And the firm warns that stress in their corner of finance could ripple out and hit the entire system.

Getting into private equity may mean trouble getting out, Bloomberg’s Matt Levine explains. Retail investors usually invest in products like stocks and mutual funds, since they provide an easy way to get cash back out. That’s especially important when life throws a wrench into financial plans. Besides, Levine writes, private markets investments come with high fees, don’t necessarily make good on the promise of higher returns, and lack the same types of disclosures as public markets.

And, anyway: Analysis by The Financial Times shows that public stocks are dramatically outperforming private fund indexes over both short- and long-term horizons, meaning it may be better to invest in traditional investment products.

Financial Media on PE and Mom and Pop Investors.

The Financial Times warns that opening 401(k) plans to private equity creates a "high-risk adventure playground" for everyday savers. Bloomberg echoes the concern, noting these high-fee, illiquid funds often underperform during downturns and become harder to manage as they swell, placing ordinary investors in complex financial products suited for the wealthy . Regulators are already reconsidering long-standing restrictions to allow these tricky assets into mass-market retirement vehicles. But critics sound the alarm: retirees would be exposed to hidden fees, reduced transparency, excessive risk, illiquidity and opaque valuations.

…And Private Credit.

The private credit industry — the nonbanks dishing out risky, under-regulated loans – has ballooned to nearly $2 trillion in assets under management. A paper from the University of Massachusetts Amherst says it can pose risks to investors and the economy at large. This form of lending has attracted (sometimes already debt-burdened) borrowers who can’t typically get credit from regulated banks, driving increased defaults, the researchers write. They point to one example of a private equity-backed company that defaulted on a $4 billion debt obligation. And the firms that do this type of lending open their investors, such as public workers’ retirement funds, to greater risk. All of the issues are compounded by the industry’s secrecy, and its interconnectedness with traditional finance.

Rewarded for Making Things Worse.

Wall Street just scored a stealth victory in Trump’s new tax bill, rewarding private equity firms for loading up acquired companies with debt, slashing wages, closing factories, and firing employees. “In effect, your boss gets a tax cut for firing you,” reports The Lever, highlighting a loophole tucked into the legislation after fierce lobbying by PE giants tied to Trump allies. The bipartisan tax provision essentially subsidizes layoffs by increasing the amount of interest payments that can be deducted from federal taxes, giving firms billions in tax breaks when they hollow out businesses and communities.

PE and Healthcare.

Oregon just made history by signing the toughest law in the country to rein in private equity’s grip on healthcare. Governor Tina Kotek signed the new law, SB 951, that cracks down on Wall Street-backed takeovers by banning non-physician ownership of medical practices and outlawing the shady “friendly” management deals that private equity firms use to quietly seize control. This is a direct response to corporate consolidation disasters, like Optum’s takeover of Oregon Medical Group, and a bold stand against profit-driven care that puts investors before patients.

PE Unschooled.

Yale University is in a dash to sell off its $6 billion-stake in private equity investments in a single sale, a possible “wake-up call” for other investors to get out too, some analysts suggest. The massive undertaking, codenamed “Project Gatsby,” comes amid the industry’s difficulty generating returns for its investors. The university’s single biggest position is a $600 million stake in a fund from 22 years ago. More broadly, moves like this could shed greater light on how private assets are valued — or overvalued.

PE and Number Crunchers.

Private equity firms Hellman & Friedman and Warburg Pincus want someone to buy Edelman Financial Engines — a company they created to swallow up a ton of smaller financial advisors across the country — for $8 billion. It’s an “ambitious” price tag that will test the limits of this monopoly-making part of PE’s playbook. Last year, another firm tried to sell off its own financial-advisory roll-up company, but was unsatisfied with the bids.

CRYPTO

Unstablecoins.

In a less-than-genius flourish, Senate Republicans and a big chunk of Democrats, passed the GENIUS Act, a huge giveaway to the volatile cryptocurrency industry, Big Tech, and crypto-grabbing Trump family. The bill would expose the financial system to stablecoins — crypto tokens that are ostensibly pegged to real assets, except for when they are disastrously not. Its passage would empower Big Tech to issue their own currencies. And it would mean that trouble in the digi-sphere could ripple out to the everyday economy.

Warned AFR’s Mark Hays: “Thanks to this legislation, the next crypto collapse will no longer happen in a vacuum; instead the entire financial system will be subject to the instability of an industry rife with scandal, exploitation and illicit finance.”

The bill allows some crypto banks to circumvent state rules and spread across the country. George Washington University’s Art Wilmarth said that states that accept these crypto banks’ business would have no way to enforce consumer protection laws and couldn’t keep an eye on certain indicators of financial distress.

Meanwhile: Mega-corporations like Walmart and Amazon are already exploring the creation of their own stablecoins, which would force enormous volumes of financial transactions out of the traditional financial system and onto their own courts.

Plus: The Financial Action Task Force said that most blockchain crime involves stablecoins. The Task Force said that mass adoption of stablecoins will make illicit finance risks worse.

Ripple.

A few years ago, the SEC sued Ripple over its sale of unregistered securities, by way of its XRP crypto token. In 2024, a federal court partially agreed with the SEC in that it did violate securities law (in certain circumstances), issuing an injunction and directing the crypto firm to pay a $125 million civil penalty. Then, in May 2025, the SEC decided to “settle” with Ripple on the condition that the court vacated its injunction and reduced the penalty. The parties asked the court to do just that.

In a critical ruling, however, District Judge Analisa Torres denied the motion, agreeing with the “reasonable probability” that Ripple would keep violating federal laws if the injunction wasn’t in place.

Trump’s Crypto.

Recent reports reveal that Donald Trump is personally profiting from the same crypto industry he's working to deregulate. A new SEC filing shows Trump Media is raising $2.5 billion to build a Bitcoin treasury—while Trump pushes policies to prevent Bitcoin from being regulated as a security. At the same time, the Trump family has boosted their own net worth by $2.9 billion from their crypto ventures, including token sales and a stablecoin project.

Critics say this is a clear case of Trump using public power to boost private profits, advancing deregulatory policies that benefit his own bottom line. “This windfall for the crypto industry will pave the way for Big Tech to create their own corporate currencies with little oversight but big risks for consumers and the economy,” said AFR’s Mark Hays.

Crypto Crime.

Russian-linked actors allegedly laundered up to $500 million through stablecoins like Tether to help sanctioned banks in Russia and Iran evade U.S. sanctions. In another case, U.S. authorities seized a record $225 million from a massive crypto investment scam that defrauded more than 400 people through so-called “pig butchering” schemes.

Blockchain Stocks?

The crypto exchange Coinbase wants SEC approval to start selling tokenized stocks, opening the door to a grave work-around to existing securities law. Essentially, Coinbase would turn shares of a publicly traded company into crypto-like tokens. Then, its customers could purchase those tokens to represent ownership of that company, rather than actually owning the securities themselves.

Normally, in order to sell securities, a company has to be registered as a broker-dealer. The Biden-era SEC, however, previously sued the exchange for operating as a securities dealer without such a license — an enforcement action withdrawn earlier this year by the crypto-friendly Trump SEC. Allowing Coinbase to proceed would effectively make all stock and bond market rules optional, as companies simply opt into the markets of their choice.

Despite the industry’s hype, however, there isn’t much buy-in from the broader financial system right now. Only $388 million worth of equities are currently tokenized, a drop in the $120-trillion global equities market.

Separately: BlackRock, the world’s biggest money managers, has a $2.9 billion tokenized money market fund. Some major crypto exchanges are going to let it use the fund tokens as collateral to back its other crypto bets.

Thiel.

As the current administration ramps up its support for the volatile crypto industry, a crypto exchange backed by Trump crony Peter Thiel wants to go public.

HOUSING

Crypto in the House?

The Federal Housing Finance Agency (FHFA) ordered Fannie Mae and Freddie Mac, the two government-backed companies that guarantee most of the nation’s mortgages, to let borrowers count their volatile and hard-to-verify crypto holdings as assets when they apply for mortgages — without requiring them to turn it into cash first.

The Insurance Crisis.

Seven percent of homeowners are going without home insurance because they can’t afford it, according to a survey from the Fed. Between rising costs, the Trump administration’s cuts to disaster relief and preparedness programs, and the loss of critical information that once provided a clear picture of the climate catastrophe, people across the country are at risk of being hit harder by climate-intensified disasters and soaring insurance costs and cancelations.

Said AFR’s Caroline Nagy: "I think the ultimate outcome of folks either being unwilling or unable to pay their property insurance is going to be a lot of pain, and a lot of damage and hardship."

The problem isn’t exclusive to flood-prone coasts and wildfire-stricken ranges. The Fair Housing Center of Central Indiana explored how the insurance crisis has impacted their Midwestern state. From 2021 to 2024, the average home insurance premium in Indiana jumped by 16 percent. In 2022, one in every 54 policies were cancelled in 2022 due to the homeowner falling behind on payments. And renters are likely to feel the increased costs too.

It has the potential to snowball into the next big financial crisis, the Financial Times explains. One hypothetical route to contagion they present: A flood of insurers abandon states; without insurance, people can’t get mortgages, and banks’ mortgage businesses dry up. Some stop offering mortgages. Some report losses. Mortgage defaults rise, and with them foreclosures and credit card delinquencies … These losses then create panic. You get the idea.

Have HOPE.

AFR and 12 other organizations support Sen. Jeff Merkley’s HOPE (Humans Over Private Equity) for Homeownership Act, a bill that would penalize the massive corporate landlords that are gobbling up the nation’s housing stock, preventing families from buying homes, driving up rents, and amplifying the growing housing affordability crisis.Said AFR’s Caroline Nagy:

Predatory corporate landlords are contributing to the skyrocketing (30 percent) increase in home prices over the past five years, putting homeownership further out of reach for younger families. Corporate landlords are stealing the American dream and opportunity of homeownership for an entire generation of young people. It’s time for the Senate to take a stand against corporate homebuyers by passing the HOPE for Homeownership tax as part of the reconciliation process.

Last Resort.

Most states have residual insurance programs, which offer coverage to people who can’t get it on the private market from corporate insurers like Allstate or State Farm. Whether it’s because premiums have risen untenably high or because private insurers have abandoned certain areas, more and more property owners have fallen into these programs of last resort out of necessity. Cornell University and the Environmental Defense Fund examined ways that some of these programs have reduced the risk that they are increasingly exposing themselves to.

Their main findings: Some residual insurance programs offer discounts or grants to property owners who take certain risk-mitigation measures, like clearing vegetation in fire-prone areas or retrofitting their walls and roofs. And some help fund the cost of certain upgrades after a loss.

Related: A landmark decision in the Los Angeles Superior Court said that a policy by California’s residual insurance program, which didn’t compensate homeowners for smoke damage after a fire, is illegal.

Pushing Back.

This month, two lawsuits in the Los Angeles Superior Court accused two of the nation’s largest home insurers of fraud, negligence, and bad faith after wildfires ripped through LA County in January this year. The California plaintiffs allege that both the United Services Automobile Association (USAA) and Interinsurance Exchange of the Automobile Club, or AAA, used flawed software, failed to inspect homes, ignored building features, and refused to allow purchases of additional insurance.

The cases are: Ethan Alexander et al. v. United Services Automobile Association and James R. Fulker et al. v. Interinsurance Exchange of the Automobile Club.

A Bad Budget for Housing.

This month, the National Fair Housing Alliance warned that the Trump administration’s plans to slash the Department of Housing and Urban Development’s budget and related programs would make the fair and affordable housing crisis worse. Said NFHA’s Nikitra Bailey: “These harmful cuts will not result in efficiencies and instead will hurt everyday people trying to secure housing free of discrimination with the ability to live and thrive in well-resourced communities.”

But: This week, civil rights law firm Relman Colfax filed a federal class-action lawsuit on behalf of the National Fair Housing Alliance and Tennessee Fair Housing Council which challenged HUD’s “unprecedented and unlawful refusal” to administer grants under the Fair Housing Initiatives Program.

Nebraska.

A new report from AFR, using data from the U.S. Treasury’s Federal Insurance Office, reveals alarming trends in Nebraska’s 1st Congressional District, where homeowners are being hit hard by the growing insurance crisis. Between 2018 and 2022, over two-thirds of ZIP codes saw claim frequency spike—more than half by over 200%. Nonrenewal rates more than doubled in 72% of ZIP codes, and in 2022, nearly a quarter of ZIP codes had paid loss ratios above 100%, meaning insurers paid out more in claims than they collected in premiums. These sharp increases—driven by climate-fueled disasters like severe storms—highlight the urgent need for more transparent data collection and stronger protections to ensure rural and high-risk communities aren’t left behind.

Don’t Pay Off a Racist Mortgage Lender.

A federal judge in Chicago has rejected the Trump-aligned CFPB attempt to walk back a redlining settlement against Townstone Financial Inc., a mortgage lender originally penalized by the Biden-era CFPB for discriminatory practices. The 2023 enforcement action stemmed from years of racist, disparaging remarks made by Townstone’s CEO on public radio—including comments targeting Black neighborhoods in Chicago—and the company’s failure to generate mortgage applications from communities of color. This week, a federal judge firmly denied the Trump CFPB’s request to reverse the settlement and return the penalty, warning that allowing political appointees to dismantle court-approved civil rights settlements would “erode public confidence” and open a “Pandora’s box” of legal instability.

CLIMATE and FINANCE

Private Equity, Public Harm.

Last week, the Private Equity Climate Risks (PECR) project — a climate research consortium made up of AFR, Global Energy Monitor (GEM), and Private Equity Stakeholder Project (PESP) — traced at least $15 billion of health costs annually to private equity-backed fossil fuel infrastructure across the United States. Because of just a select few carbon-belching assets, private equity-backed air pollution contributes to around 1,000 premature deaths, 300,000 lost school days and 27,000 lost work days every year.

Said GEM’s Alex Hurley: “Private equity plays an outsized yet obscured role in the fossil fuel economy. These findings shine a light on how people’s health is directly impacted by these investments and reinforce the critical need to transition away from fossil fuels.”

Big plus: There’s a data dashboard you can explore if you want to see how a handful of PE assets hurt you and your community.

False Solutions.

PECR also published a report which reveals how private equity firms invest in “false solutions” to climate change, rather than true decarbonization efforts: A Look at Private Equity Transition Funds: Energy Innovation or Greenwashing?

These purported climate solutions, which include things like point source carbon capture, carbon trading, hydrogen from fossil fuels, and so-called “renewable” natural gas often serve as a distraction to prolong the use of fossil fuels, harming communities and creating confusion for investors seeking genuine climate action.. While many of these may sound good on paper, they’re either not cost-effective or scalable or don’t reliably lower emissions, and they are promoted mainly by the fossil fuel industry to maintain its operations and typically deployed with limited oversight and accountability.

Climate Catastrophe and Your Cash.

The Sierra Club’s June 2025 report, The Long Term Will Be Decided Now, urges investors to confront climate change not as a niche issue, but as a full-blown systemic risk to the global economy and long-term financial security. Author Ben Cushing argues that conventional investment strategies, even those branded as “sustainable,” often focus too narrowly on minimizing individual company risk, while ignoring how climate-fueled disasters erode the broader economic foundations that support pensions, 401(k)s, and other long-term portfolios. Instead, the report calls for “system-level investing,” a shift that demands real-world impact: moving capital away from fossil fuels, holding corporate polluters accountable, pushing for pro-climate policy, and demanding action from financial service providers.

Wall Street Wildfire.

California is facing mounting scrutiny over how wildfire recovery is being handled, both by investors and insurers. Hedge funds have come under fire for buying up subrogation claims from the state's Wildfire Fund, a move California officials slammed as unethical profiteering that could inflate costs, delay relief, and deplete the state’s ratepayer-funded emergency wildfire fund. At the same time, State Farm is under investigation by state regulators and facing lawsuits over its handling of wildfire insurance claims. Survivors allege the company delayed payments, repeatedly reassigned adjusters, and underinsured homes using flawed reconstruction-cost software—leaving many unable to rebuild. These developments are fueling calls for stronger oversight and reforms to protect wildfire victims from financial exploitation.

Banks and Fossil Fuels.

Despite the climate chaos, the world’s 65 biggest banks increased how much they committed to fossil fuels in 2024 (the warmest year on record), according to 2025’s Banking on Climate Chaos report. Altogether, they shoveled $869 billion to companies conducting business in fossil fuels. Topping the list: JPMorgan Chase, Bank of America, Citigroup, Mizuho Financial and Wells Fargo.

Not Enough Info.

The International Sustainability Standards Board (ISSB), the body that sets international standards for how financial institutions should disclose information about climate risks, is thinking of excluding disclosure of greenhouse gas emissions from insurance underwriting, investment banking, and derivatives activities. This would mean that an insurer choosing to underwrite a fossil fuel project or a bank that underwrites debt or equity for a fossil fuel company wouldn’t have to account for those emissions when making disclosures. AFREF and 16 other organizations oppose the amendment and call for the ISSB to require disclosure of insurance-related emissions and facilitated emissions.

Earlier this month, the Basel Committee on Banking Supervision, an international organization that sets the standards for bank watchdogs, laid out how banks should voluntarily disclose their climate-related financial risks. Public Citizen calls it a necessary acknowledgement of financed emissions but claims that it doesn’t go far enough and opens the door to “emissions laundering” that may leave some emissions unaccounted for.

And: The Revolving Door Project criticizes recent attacks by lawmakers and regulators on federal climate data. They write: “The loss of public climate data will hasten insurers’ retreat, as it leaves insurers without a reliable data source to estimate potential losses. Cuts to climate data will also indirectly drive up the costs paid by consumers and taxpayers. Policyholders will invariably pay a price as public climate data sources are decimated, and the only question is how high the price will be.”