Washington nonprofit Better Markets sues Federal Reserve over capital rule overhaul

A spokesperson for the Fed did not immediately respond to a request for comment. Bowman, who has been leading the changes, has previously said her goal is to streamline regulations and oversight to make them more sensitive to real risks.

The unusual suit, one of a handful ever brought against the Fed, signals a growing backlash against President Donald Trump's administration's effort to scale back a raft of what regulatory advocates say are essential supervisory and regulatory financial system safeguards.

While Wall Street groups have frequently sued federal regulators, litigation against the Fed over rulemakings is rare. Big banks in 2024 under the former Democratic administration sued the central bank over its annual "stress test" health checks and fair lending rules, but those suits were the first in recent memory, according to a Reuters analysis at the time and academic Fed-watchers.