You know what banks really don’t like? Stress tests. Not only do they seem arbitrary and capricious, not only do they force them to fill entire floors of expensive Manhattan real estate with stacks of $100 billions that they’d really prefer to mail to shareholders, but they also occasionally fail them, or at least fail to pass them with anything like flying colors.

Brian Moynihan knows what we’re talking about.

Suffice it to say, no one on Wall Street would shed a tear were the stress tests to go away forever, or at least become easier to cheat on. One way to potentially make one of those things happen would be to sue the Fed. This, admittedly, is a fairly drastic option given that, as one of the people mulling this option says, whatever happens, the Fed will continue regulating the very same banks “every minute of every day of every week,” and could easily make those minutes and days and weeks exceedingly unpleasant, stress tests or no. Still, in demanding that banks take whatever steps necessary to remain solvent during a financial hurricane, the Fed may have pushed them too far.

The discussions are at an early stage and big banks are divided over whether the talks should continue, the people familiar with the matter said. Over the past several months, industry advisers and representatives from some big U.S. banks have been involved in several calls discussing the possibilities, with the latest occurring a few weeks ago, the people said….

In considering a legal challenge, banking groups have discussed an argument that would center on the opacity concern: that the Fed is violating the Administrative Procedure Act by not allowing meaningful public input into the tests, according to the people familiar with the talks.

Bank Groups Weigh Legal Challenge to Fed Stress Tests [WSJ]