Washington, D.C. — The Federal Reserve and a coalition of bank and business groups today requested a pause in litigation challenging the Federal Reserve’s stress testing framework. The challenge is being brought jointly by the Bank Policy Institute, the American Bankers Association, the U.S. Chamber of Commerce, the Ohio Bankers League and the Ohio Chamber of Commerce.
The plaintiffs issued a statement:
“The Federal Reserve is undertaking a good-faith effort to align the stress testing regime with the law and establish transparency and accountability for that process. A stay of the litigation will allow the Federal Reserve to focus on implementing its commitments through the rulemaking process and delivering a more accurate and reliable framework for the next stress testing cycle. We will continue to monitor progress and hope to arrive at an amicable solution that renews trust in this important piece of the regulatory capital framework.”
Additional background:
The Joint Motion to Stay Proceedings was filed by the plaintiffs and the Federal Reserve in the Southern District of Ohio, where the case was initiated by the plaintiffs in December 2024. The motion would pause proceedings in the case at least until August 1, 2025. In the motion, the plaintiffs and the Federal Reserve indicated that they may ask the Court to extend the stay beyond August, a decision the plaintiffs will make on the basis of the progress made by the Federal Reserve to that point.
Stress testing has a significant effect on banks’ ability to support the economy and lend to households and businesses. The plaintiffs have repeatedly acknowledged the importance of this tool, and their challenge does not seek to eliminate stress testing. The goal of the litigation is to ensure the methodology is subject to public input and transparency oversight through a regular rulemaking process.
Learn more:
- Banks and Business Groups Press for Transparency in Flawed Stress Testing Framework
- Banks and Business Groups File Legal Challenge Against Federal Reserve Over Flawed Stress Testing Framework
- Stress Testing 101
To learn more about the challenge, please click here.
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About Bank Policy Institute.
The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
Media Contacts
- Austin Anton, Bank Policy Institute, austin.anton@bpi.com
- Jeff Sigmund, American Bankers Association, jsigmund@aba.com
- Evan Kleymeyer, Ohio Bankers League, ekleymeyer@ohiobankersleague.com
- Shira Rawlinson, U.S. Chamber of Commerce, srawlinson@uschamber.com
- Courtney Whetstone, Ohio Chamber of Commerce, cwhetstone@ohiochamber.com
