WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following statement on the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR) and Dodd Frank Act Stress Test (DFAST) results. Stress tests are assessments performed by the Federal Reserve to ensure banks are strong enough to withstand a downturn in the economy without setting off another financial crisis. According to the results, approximately one quarter of the 33 banks subject to the tests could fall below their minimum capital requirements if coronavirus cases continue to increase or if the economic recovery is not as strong as the White House hopes, threatening another big bank bailout.

“The Federal Reserve has already forgotten the lessons of the 2008 crisis,” said Senator Brown. “Instead of protecting workers and their families and the economy, the Fed continues to protect bank payouts to investors and CEOs. The Federal Reserve’s failure to take decisive action to stop dividends now creates very real risks that this public health and economic crisis will become a financial crisis as well.”

The Trump Administration and Senate Republicans have pursued a deregulatory agenda that have made stress tests for most large banks less frequent. They have weakened the tests by reducing the amount of capital required to pass, handing out more information to help banks prepare in advance, and exempting banks from the most stringent components.