In a major legal development, a federal judge has ordered Bank of America to pay $540.3 million in a long-running FDIC dispute with the Federal Deposit Insurance Corporation (FDIC). The ruling, issued by U.S. District Judge Loren AliKhan in Washington, D.C., resolves part of a lawsuit that dates back to 2017, when the FDIC accused the banking giant of underpaying its required contributions to the federal deposit insurance fund.
The FDIC dispute centers on a 2011 regulatory rule change aimed at improving how banks report risk exposure to their counterparties — a move that followed sweeping financial reforms in the wake of the 2008 financial crisis. The FDIC claimed Bank of America failed to comply with the rule, thereby reducing its insurance assessments and unjustly enriching itself.
Judge AliKhan’s ruling, released in a partially redacted form on April 14, determined that Bank of America must pay the multimillion-dollar amount to cover underpaid assessments from the second quarter of 2013 through the end of 2014, along with interest. However, the judge also ruled that the FDIC had waited too long to pursue claims related to periods before mid-2013, putting those assessments outside the statute of limitations.
While the bank denied any wrongdoing and said it did not act with intent to evade payments, the court found no merit in arguments that the FDIC’s rule was unreasonable or that the agency acted arbitrarily. In response to the ruling, Bank of America stated that it had already set aside reserves in anticipation of this outcome.
“We are pleased the judge has ruled and have reserves reflecting the decision,” said spokesperson Bill Halldin.
The FDIC, which plays a key role in safeguarding the stability of the U.S. banking system and insures deposits up to $250,000, declined to comment on the ruling.
Despite the hefty payment order, Bank of America remains financially strong. On Tuesday, the Charlotte-based bank reported a first-quarter profit of $7.4 billion and revenue of $27.37 billion, exceeding analyst expectations.
The case, officially titled FDIC v. Bank of America NA, is a reminder of the lasting impact of post-crisis regulatory reforms and the ongoing scrutiny financial institutions face from federal watchdogs.
