Bank of America ordered to pay the FDIC $540 million in an 8-year-old case
Bank of America must pay over half a billion dollars to the Federal Deposit Insurance Corp. for underpaying deposit insurance to the agency, a federal judge has ordered in an eight-year-old case.
The Charlotte-based bank was ordered to pay $540.3 million for assessments from 2013 through 2014 by U.S. District Judge Loren AliKhan in the District of Columbia, in her partial summary decision filed Monday in favor of the FDIC.
In 2017, the FDIC sued the second-largest U.S. bank for failure to pay $1.12 billion in deposit insurance assessments in violation of the Federal Deposit Insurance Act, and claimed the bank had “unjustly enriched itself at the FDIC’s expense by retaining that money,” according to court documents.
Bank of America “should have been able to identify with ascertainable certainty the standards it was expected to apply,” AliKhan said in the March 31 decision, made public this week.
During the bank’s first-quarter earnings call Tuesday, CEO and President Brian Moynihan and CFO Alastair Borthwick both referenced higher litigation costs related to a recent decision in a long-running matter. Neither discussed details of the case.
The FDIC, formed in 1933 during the Great Depression, is an independent government agency that insures deposits at U.S. member banks, ensuring depositor safety for customers in case of bank failure.
Bank of America lawsuit background
According to The Charlotte Observer archives, Bank of America has said the payments in question were derived from a technical disagreement about a calculation after a rule change, and that it was not evading payment.
The FDIC had been increasing how much the biggest U.S. banks must pay into the deposit-insurance fund after the 2008 financial crisis. The crisis drove the deposit fund billions of dollars into the red, as hundreds of banks collapsed and the government had to weigh in to ensure depositors didn’t lose money.
In 2011, the FDIC revised rules to cut out the practice that many banks were using to reduce their assessments by declaring lower levels of counter-party risk. Counter-party risk is described by the Office of the Comptroller of the Currency as the probability that the other party in an investment, credit or trading transaction may default on the contractual obligations.
The FDIC sued Bank of America following a 2016 audit, saying the bank failed to follow this rule.
This story was originally published April 15, 2025 at 1:18 PM with the headline "Bank of America ordered to pay the FDIC $540 million in an 8-year-old case."