Compare & Choose Wisely

  • Home
  • Insurance
Search

Judge Orders Bank of America to Pay $540 Million in FDIC Lawsuit

 Avatar
Judge Orders Bank of America to Pay $540 Million in FDIC Lawsuit

A federal judge ordered Bank of America to pay $540.3 million in a long-running Federal Deposit Insurance Corporation lawsuit accusing the second-largest U.S. bank of underpaying what it owed for deposit insurance.

In a decision made public on Monday, U.S. District Judge Loren AliKhan in Washington, D.C., said the payment covers assessments from the second quarter of 2013 through the end of 2014, plus interest.

The FDIC sued Charlotte, North Carolina-based Bank of America for $1.12 billion in 2017, accusing it of reducing its deposit insurance contributions by failing to honor a 2011 rule that changed how banks report risk exposure to counterparties.

That rule was one of many federal reforms designed to ensure the stability of the banking system, and avert a repeat of the 2008 global financial crisis.

In a 59-page decision, AliKhan rejected Bank of America’s claims that there was no reasonable basis for the rule, and that the FDIC acted arbitrarily and capriciously.

AliKhan said the FDIC was not required to develop a “perfect measure” of predicting banks’ potential exposure to losses, and Bank of America could claim it “lacked fair notice of what was required of it.”

She also said the FDIC waited too long to sue over claims predating the second quarter of 2013.

Bank of America strongly denied any intent to evade payments.

Bill Halldin, a Bank of America spokesperson, said in a statement: “We are pleased the judge has ruled and have reserves reflecting the decision.”

The FDIC declined to comment.

AliKhan issued her decision on March 31, and released it in partially-redacted form.

Bank of America is expected to report first-quarter results on Tuesday.

The case is FDIC v Bank of America NA, U.S. District Court, District of Columbia, No. 17-00036.

Topics
Lawsuits
Legislation

Interested in Lawsuits?

Get automatic alerts for this topic.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Search

Featured Articles

  • US Supreme Court Makes ‘Reverse’ Discrimination Lawsuits Easier to Pursue

    US Supreme Court Makes ‘Reverse’ Discrimination Lawsuits Easier to Pursue

  • AM Best Upgrades Credit Ratings of Members of Midwest Insurance Group

    AM Best Upgrades Credit Ratings of Members of Midwest Insurance Group

  • Billion-Dollar Carolina Battery Plant Pauses Construction Amid Tariff Uncertainty

    Billion-Dollar Carolina Battery Plant Pauses Construction Amid Tariff Uncertainty

  • Hub International Acquires Wycoff Insurance Agency in Washington

    Hub International Acquires Wycoff Insurance Agency in Washington

  • Be Recognized as an Independent Agency Leader

    Be Recognized as an Independent Agency Leader

  • Instagram
  • Facebook
  • LinkedIn
  • X
  • VK
  • TikTok

Proudly Powered by WordPress | JetNews Magazine by CozyThemes.

Scroll to Top