Biggest banks sue the Federal Reserve over annual stress tests

[BumRushDaShow]

Source: CNBC

Published Tue, Dec 24 2024 7:53 AM EST Updated 3 Hours Ago


A group of banks and business groups are suing the Federal Reserve over the annual bank stress tests.

The Bank Policy Institute, which represents big banks like JPMorgan, Citigroup and Goldman Sachs is joining the American Bankers Association, the Ohio Bankers League, the Ohio Chamber of Commerce and the U.S. Chamber of Commerce to file the suit, which they said aims to “resolve longstanding legal violations by subjecting the stress test process to public input as required by federal law.”

The groups said they don’t oppose stress testing, but that the current process falls short and “produces vacillating and unexplained requirements and restrictions on bank capital.” CNBC earlier reported on the plans to file a suit.

The Fed’s stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans and dictates the size of share repurchases and dividends.

Read more: https://www.cnbc.com/2024/12/24/biggest-banks-planning-to-sue-the-federal-reserve-over-annual-stress-tests.html

[Hassin Bin Sober]

1. Deregulate the banks and let them place all their assets in crypto - Trump (aka Elon Musk), probably.

[in2herbs]

8. They primarily want to de-regulate the banks so that Wall Street can use our deposits in banks

to invest in the stock market to make them richer.

[2naSalit]

2. They need to be...

Told to sit down and STFU.

Time to eat the rich.

[sakabatou]

3. And then they'll come crawling to the Reserve for money when they buckle

[LiberalArkie]

4. I would think they would be trying to eliminate the FDIC and thus the payments the banks make to support the FDIC

[quakerboy]

5. I do believe that was recently mentioned

Yup. Quick google search says it's on the trump transition team to do list.

[FakeNoose]

6. I believe the New Civil War will begin before that actually occurs

That ... or Chump will be impeached and convicted, finally and for all time.

Even the Repukes are smart enough to see what a disaster that would be.

[Miguelito Loveless]

9. Definitely mention by the 45 regime

in the last month as a top priority.

[Igel]

11. Why? You'd think they'd like the FDIC.

The 2025 program thing said it encouraged irresponsibility of sorts--if a bank screws up, the FDIC bails them out.

This is the banks thinking that the bar against irresponsibility was set too high. But that presumes bailout if things go all pear shaped on them.

No FDIC, when the bank goes belly up it's at the mercy of market forces. Lots of banks failed. The Civil War was brutal on Southern banks. A bank crash in the 1870s wiped out a lot of them. The best they could hope for was that in bankruptcy a better bank would come along and buy up what assets they had, but investors, both those with deposits and those that owned stock, were very, very seldom made whole. But in the absence of that, the assets would just have been liquidated and a lot of people would have been entirely ruined. (Which is, in fact, what happened before the FDIC was established. Note that in discussion of how wealth was transmitted by banks in the 1800s often an account says "Bank A was bought up by Bank B," but leaves out that Bank A was usually pretty much drained of assets, of the wealth that moderns think was necessarily transmitted. )

[in2herbs]

7. Project 2025 calls for dissolving the FDIC. Unsuccessful in 2017, 2025 is their first attempt. nt

[lonely bird]

10. Under fractional reserve banking

All banks are broke.

[mpcamb]

12. Goldman Sachs?!? Don't they have a history with PUBLIC finacing?

[LudwigPastorius]

13. WAAAA!!

We can't use our depositors' money at the casino!! WAAAH!

[oldmanlynn]

14. We need a list of the banks that are suing

So people will know not to do business with these banks.

[BumRushDaShow]

17. The CNBC article had a link to a copy of the complaint

(PDF) - https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2024/12/24/BPI-OHChamber-OHBankers-ABA-Chamber-Stress-Testing-Complaint-20241224.pdf

It looks like some of the banks are doing this under an umbrella of various organizations. But what caught my immediate attention going to the bottom of the complaint, was who signed it, where I saw this with the initial signature -

Dated: December 24, 2024
Don Boyd (No. 0089180)
OHIO BANKERS LEAGUE
4215 Worth Avenue, Suite 300
Columbus, OH 43219
Telephone: [phone]
Attorney for Plaintiff Ohio Bankers League
Respectfully submitted,

/s/ James A. King
James A. King (No. 0040270)
Trial Attorney
PORTER WRIGHT MORRIS & ARTHUR LLP
41 South High Street, Suites 2800 - 3200
Columbus, OH 43215
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Eugene Scalia*
Matt Gregory*
Max E. Schulman*
Giuliana C. Cipollone*
Olivia R. Goldberg*
GIBSON, DUNN & CRUTCHER LLP
1700 M Street, N.W.
Washington, D.C. 20036
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
ogoldberg@

[oldmanlynn]

15. Remember the san francisco bank that went under

Because trump removed stress tests for banks and as a result the bank did some shady investments that made many lose their fortunes and retirements.

[Dumpy]

16. Get rid of fractional reserves and the banks will never run out of money.

Make 100% reserves on demand deposits. 0% reserve on CDs. We would see CD rates rise to attractive savings.