Bank of America ordered to pay $540 million in long-running lawsuit from the FDIC
Bank of America ordered to pay $540 million in long-running lawsuit from the FDIC
NEW YORK (AP) — A federal judge has ordered Bank of America to pay more than $540 million to resolve long-running litigation from a U.S. regulator that alleged the company underpaid mandatory assessments for deposit insurance.
The order, reached March 31 and published publicly on Monday, arrives over eight years after the Federal Deposit Insurance Corporation sued Bank of America in 2017.
“We are pleased the judge has ruled and have reserves reflecting the decision,” Bank of America said in a statement to The Associated Press. The FDIC declined to comment when reached Tuesday.
Back in 2017, the FDIC accused Bank of America of refusing to pay over $500 million in assessments — a figure it later expanded to $1.12 billion — alleging that the banking giant failed to honor a 2011 regulatory rule and “unjustly enriched itself” at the FDIC’s expense.
The Bank of America later filed a motion to dismiss in part, strongly denying it acted with an intent to evade such payments. It also argued that some of quarters the FDIC targeted for assessments fell outside the statue of limitations.
After a yearslong legal battle, U.S. District Judge Loren L. AliKhan in Washington, D.C. partially granted and denied motions for both Bank of America and the FDIC. She said that the nearly $540.3 million payment from Bank of America would cover its underpaid assessments spanning from the second quarter of 2013 through the end of 2014’s fiscal year, plus interest — but ruled that the FDIC waited too long to sue over earlier claims.
Formed in 1933 during the Great Depression, the FDIC is one of several banking system regulators today. The agency is best known for running the nation’s deposit insurance program, which insures Americans’ deposits up to $250,000 in case their bank fails.
Bank of America, headquartered in Charlotte, North Carolina, is the second-largest bank by assets in the U.S. On Tuesday, the company reported a first-quarter profit of $7.4 billion and $27.37 billion in revenue net of interest expense, topping Wall Street expectations.
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