Federal Reserve Sued Over Alleged Corruption in Capital Regulation Overhaul
A Washington nonprofit called Better Markets has filed a lawsuit against the U.S. Federal Reserve and its top regulatory official, Michelle Bowman, over the central bank's overhaul of its capital regulations.
The suit alleges that Bowman's private interactions with Wall Street banks about an open public consultation on major capital rules 'corrupted' the federal rulemaking process, depriving Better Markets of due process under the Fifth Amendment.
The lawsuit cites Reuters reporting from April, which stated that Bowman told banking executives she did not expect them to stage another major pushback in an attempt to win further capital relief. It also cites a report by Bloomberg, which said she privately 'told Wall Street leaders to support capital plans that are widely seen as a win for industry and stop asking for carve outs.'
The Fed proposed changes to the Basel, GSIB surcharge, and other related rules in March, which would result in capital falling for big banks by 4.8% in aggregate.