Federal Reserve Faces Lawsuit from Big Banks, Business Groups: What to Know [Video]

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Groups representing banks and businesses, including the Bank Policy Institute, have filed a lawsuit on Tuesday against the Federal Reserve for violating federal law with the “opaque aspects of the stress testing framework.”

“For years, we have highlighted serious concerns about the stress testing framework and the need for reform,” Greg Baer, the president and CEO of the Bank Policy Institute, said in a press release. “The current opaque regime, combined with the lack of clear standards for the global market shock and the operational risk charge, continues to produce capital charges that are inaccurate, volatile and excessive, resulting in reduced lending and economic growth.”

Newsweek reached out to the Federal Reserve for comment. Eric Kollig, who is a part of the Federal Reserve Board, responded that his organization doesn’t “have anything to share at this time.”