Regulated Organization scope This letter is intended to provide some background information on climate risks, outline DFS’s expectations for New York regulated banking organizations, New York licensed branches, agencies of foreign banking organizations, New York regulated mortgage bankers and mortgage servicers, as well as New York regulated limited purpose trust companies (collectively, the “Regulated Organizations”)

Regulated Non-Depositories DFS is also providing this letter and information to New York regulated non-depositories (other than New York regulated mortgage bankers, mortgage servicers, and limited purpose trust companies), including New York regulated money transmitters, licensed lenders, sales finance companies, premium finance agencies, and virtual currency companies (collectively, the “Regulated Non-Depositories”)

DFS expects that all Regulated Organizations: i. start integrating the financial risks from climate change into their governance frameworks, risk management processes, and business strategies. For example, Regulated Organizations should designate a board member, a committee of the board (or an equivalent function), as well as a senior management function, as accountable for the organization’s assessment and management of the financial risks from climate change. This should include an enterprise-wide risk assessment to evaluate climate change and its impacts on risk factors, such as credit risk, market risk, liquidity risk, operational risk, reputational risk, and strategy risk; and

DFS expects that all Regulated Non-Depositories: conduct a risk assessment of the physical and transition risks of climate change, whether directly impacting them, or indirectly due to the disruptive consequences of climate change in the communities they serve and on their customers, such as business disruptions, out-migrations, loss of income and higher default rates, supply chain disruptions, and changes in investor and consumer sentiments, and start developing strategic plans, including an outline of such risks, the impact on their balance sheets, and steps to be taken to mitigate such risks.