The Federal Reserve and a coalition of banking and business groups have jointly requested an extension to the current stay in their ongoing litigation over the Federal Reserve’s stress testing framework. The motion, filed late last night, asks the court to extend the pause in proceedings from October 15 to November 12 or until the plaintiffs file their next brief, whichever comes first.
According to the plaintiffs, “The Federal Reserve acknowledges that more work remains to meet its public commitments. Capital requirements affect America’s economic competitiveness, which is why we support the Federal Reserve’s diligent work toward a more transparent and rational capital framework.”
This marks the second time an extension has been sought in this case. The original stay expired on August 1 before being extended to October 15. In this latest request, the Federal Reserve indicated it plans to issue proposed rulemaking notices for revisions to its stress test framework by October 24.
The anticipated changes include full disclosure of stress test models with opportunities for public comment, establishing a process for soliciting feedback on annual scenarios and future model changes, seeking input on scenario design frameworks, and introducing objective standards for elements such as global market shock and largest counterparty default components.
The lawsuit is currently pending in the Southern District of Ohio. Plaintiffs involved are the Bank Policy Institute (BPI), American Bankers Association (ABA), U.S. Chamber of Commerce, Ohio Bankers League (OBL), and Ohio Chamber of Commerce.
BPI is a nonpartisan group representing universal banks, regional banks, and major foreign banks operating in the United States. It conducts research on regulatory topics and advocates on issues like cybersecurity and fraud.
The ABA represents banks across all sizes nationwide that collectively employ millions of people and manage trillions in deposits and loans.
OBL serves as Ohio’s only organization focused on supporting all banks within the state.
The U.S. Chamber of Commerce is recognized as one of the largest business organizations globally, representing companies ranging from small businesses to large corporations across various sectors.
The Ohio Chamber of Commerce advocates for free enterprise and economic growth within Ohio.