Better Markets Sues Federal Reserve Over Capital Rule Overhaul

A Washington-based nonprofit organization called Better Markets has filed a lawsuit against the U.S. Federal Reserve, alleging that the central bank broke federal rules in its handling of a capital rule overhaul.

The suit, which was filed in Washington D.C., claims that private interactions between Fed Vice Chair for Supervision Michelle Bowman and Wall Street banks about an open public consultation on major capital rules were a breach of the Administrative Procedure Act (APA).

The APA governs federal rulemaking and bars agency officials from discussing matters related to a live rulemaking proceeding with any interested private party.

Better Markets cited Reuters reporting in April that Bowman did not expect Wall Street banks to stage another major pushback against the capital rules, but that she privately told industry leaders to support the plans and stop asking for carve-outs.