The Fed on Monday said it planned to overhaul the stress test regime for banks and planned to seek public comment on planned changes.

The U.S.'s largest banks filed a lawsuit Tuesday against the Federal Reserve over the annual stress test that requires lenders to uphold sufficient reserves for potential loans losses while also controlling the scale of share buybacks and dividend payouts,

The Bank Policy Institute, the American Bankers Association and others said proposed changes would address "some if not all" of banks' concerns about stress tests, but they are filing the lawsuit to preserve their legal right to do so.