The Bank Policy Institute, along with several other prominent business and banking organizations, has filed a legal challenge against the Federal Reserve's stress testing framework. The groups involved include the American Bankers Association, the U.S. Chamber of Commerce, the Ohio Bankers League, and the Ohio Chamber of Commerce.
These organizations argue that the Federal Reserve's decisions on stress tests can lead to increased borrowing costs and hinder banks' ability to support economic growth. They state: "The substantive choices underlying these tests’ methodology are among the most consequential policy decisions made by any agency in the federal government, requiring banks to hold hundreds of billions of dollars in capital as protection against a potential economic downturn."
The challenge further claims that the lack of transparency in this framework violates the Administrative Procedure Act by excluding public input: "Currently the Board makes these enormously important policy decisions through a secretive process that eschews the disclosure and public participation required by the Administrative Procedure Act and other fundamental principles of administrative law and democratic government."
While acknowledging that stress tests are crucial for maintaining financial stability, this legal action seeks to ensure their methodology is open to public oversight through transparent rulemaking.
Key dates for this legal proceeding have been set. The plaintiff trade associations filed a motion for summary judgment on March 21, 2025. The Federal Reserve will file its opposition brief on April 29, 2025. A final decision is requested by October 31, 2025.
The Bank Policy Institute represents various banks operating in the United States and focuses on regulatory and monetary policy issues.
Contact information for representatives from each organization involved in this case is provided: Austin Anton (Bank Policy Institute), Jeff Sigmund (American Bankers Association), Evan Kleymeyer (Ohio Bankers League), Shira Rawlinson (U.S. Chamber of Commerce), Courtney Whetstone (Ohio Chamber of Commerce).