The Federal Reserve and a coalition of bank and business associations have requested that a federal court pause litigation challenging the Fed’s stress testing framework.
Last year, the American Bankers Association joined the Bank Policy Institute, Ohio Bankers League and other trade groups in filing litigation against the Fed, challenging aspects of the stress testing framework the Fed uses to establish certain bank capital requirements. The lawsuit was filed in U.S District Court for the Southern District of Ohio.
In a joint statement about the request for the pause, the plaintiffs said the Fed is making a good-faith effort to align its 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,” the plaintiffs said. “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.”
