Key facts
- Better Markets sued the Federal Reserve and Vice Chair for Supervision Michelle Bowman on Thursday.
- The suit alleges the Fed broke federal rules in its handling of a sweeping overhaul of its capital regulations.
- The lawsuit claims private interactions between Bowman and Wall Street banks violated the Administrative Procedure Act.
- Better Markets argues these interactions constitute a "bad faith and corrupted rulemaking."
Better Markets, a Washington-based nonprofit advocating for Wall Street reforms, filed a lawsuit against the U.S. Federal Reserve and its Vice Chair for Supervision Michelle Bowman on Thursday. The suit alleges that the central bank violated federal rules, specifically the Administrative Procedure Act (APA), by engaging in private discussions with Wall Street banks regarding a significant overhaul of its capital regulations.
The lawsuit cites reporting from Reuters and Bloomberg that indicated Bowman had private meetings with industry leaders about the capital rules, which are currently under public consultation. Better Markets contends that these interactions with interested private parties during a live rulemaking proceeding are a breach of the APA.