Better Markets Sues Federal Reserve Over Alleged Corruption in Bank Capital Rulemaking
A non-profit organization called Better Markets has filed a lawsuit against the Federal Reserve and its Vice Chair for Supervision, Michelle Bowman. The lawsuit alleges that Bowman and other Fed officials broke the law by manipulating the rulemaking process for the bank capital rules in 2026.
The complaint claims that Bowman secretly met with CEOs of major Wall Street banks to coach them on how to rig the rulemaking process. This alleged corruption corrupted a rulemaking process meant to be unbiased and uninfluenced, and it's an ongoing fraud on the public, other Fed governors, and officials at other agencies considering the capital rules.
The lawsuit argues that this is similar to a judge secretly meeting with one of the parties in a lawsuit they're presiding over. The judge would then pretend to objectively review and weigh the evidence, but the public and appeal court would be kept in the dark about the judge's conduct and its impact on the record and ruling.
The bank capital rules are critical for financial stability, as they determine how much capital a bank must absorb its own losses. The rules are meant to protect Main Street families from another 2008-like financial crash, but Bowman's rules allegedly benefit Wall Street banks at the expense of Main Street families.