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In a major ruling that ends a legal dispute stretching back over eight years, a federal judge has ordered Bank of America to pay more than $540 million to resolve a lawsuit brought by the Federal Deposit Insurance Corporation (FDIC) over underpaid deposit insurance assessments.
The ruling, finalized on March 31 and made public on Monday, marks the culmination of a case that began in 2017, when the FDIC accused the bank of failing to fully comply with a 2011 regulatory rule and underpaying mandatory assessments tied to deposit insurance. The FDIC originally sought more than $1.12 billion in total.
“We Are Pleased”: Bank of America Responds to Ruling
Following the court’s decision, Bank of America said in a statement to The Associated Press, “We are pleased the judge has ruled and have reserves reflecting the decision.”
The FDIC declined to comment when approached on Tuesday.
What Was the FDIC Bank of America Case About?
At the heart of the dispute was the FDIC’s claim that Bank of America refused to pay over $500 million in required assessments. This figure was later revised to $1.12 billion, with the FDIC alleging the bank had been “unjustly enriched” at the agency’s expense by not adhering to a 2011 rule.
Bank of America strongly denied these allegations, filing a motion to dismiss in part, and argued that:
- It did not intentionally evade its obligations, and
- Several of the quarters in question were outside the statute of limitations, and therefore not subject to legal action.
FDIC Bank of America Case: What Did the Judge Decide?
After reviewing years of legal filings and arguments from both sides, U.S. District Judge Loren L. AliKhan in Washington, D.C. issued a mixed ruling. She partially granted and denied motions from both Bank of America and the FDIC.
Her final ruling directed Bank of America to pay $540.3 million, covering:
- Underpaid assessments from Q2 of 2013 through the end of fiscal year 2014
- Accrued interest on those payments
However, the judge also ruled that the FDIC waited too long to sue over assessments prior to mid-2013, meaning the agency cannot recover earlier amounts due to timing.
Why Is the FDIC Involved?
Established in 1933 during the Great Depression, the FDIC is a cornerstone of the U.S. banking system. It oversees the deposit insurance program, which guarantees up to $250,000 per depositor in the event of a bank failure. The FDIC is funded in part through mandatory assessments paid by banks, making this lawsuit especially significant for the agency’s financial operations.
Bank of America’s Financial Standing
Despite the ruling, Bank of America remains financially strong. On Tuesday, the company reported:
- A first-quarter profit of $7.4 billion
- $27.37 billion in revenue net of interest expense
These numbers exceeded Wall Street expectations, underscoring the bank’s solid footing even as it faces substantial legal payouts.
Headquartered in Charlotte, North Carolina, Bank of America is the second-largest U.S. bank by assets, with an extensive footprint in consumer and corporate banking.
