Bloomberg: Fed May Balk at Payouts Over Loan-Loss Estimates
Bloomberg reported that the Federal Reserve is pushing back against some banks’ proposals to pay dividends and repurchase shares, after concluding that the lenders are underestimating the potential for losses on consumer debt in a severe economic slump, citing people with knowledge of the situation.
The article noted that executives and Fed examiners have been wrangling in recent weeks over the central bank’s stress-test process as the March 15 deadline for results approaches. The Fed hasn’t yet given banks a ruling on its proposed payouts or told firms how much higher its estimates are for losses on mortgage loans and credit cards, the sources said.
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