The Federal Reserve, along with a coalition of bank and business groups, has requested a pause in litigation concerning the Federal Reserve’s stress testing framework. This challenge is being led by several organizations, including 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 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," stated representatives involved in the case. They emphasized that pausing litigation would allow for focus on implementing commitments through rulemaking processes and developing a more accurate framework for future stress testing cycles.
The Joint Motion to Stay Proceedings was filed in the Southern District of Ohio where the plaintiffs initiated their case in December 2024. The motion seeks to halt proceedings until at least August 1, 2025. Both parties indicated they might request an extension based on progress made by that time.
Stress testing plays a crucial role in banks’ ability to support economic activities and provide loans to households and businesses. The plaintiffs have acknowledged its importance but aim to ensure its methodology undergoes public input and transparency oversight via regular rulemaking processes.
The Bank Policy Institute describes itself as a nonpartisan group representing various banks within the United States. It engages in research on regulatory topics and represents financial services regarding cybersecurity issues.