Bank of America is ordered to pay $540.3 million following FDIC lawsuit ruling
A federal judge has ordered Bank of America to pay $540.3 million in a lawsuit after the FDIC said the bank underpaid its deposit insurance contributions.
Bank of America has been ordered to pay $540.3 million in a lawsuit filed by the Federal Deposit Insurance Corporation (FDIC) over alleged underpayments for deposit insurance contributions. The ruling, issued by U.S. District Judge Loren Alikhan, covers the period from the second quarter of 2013 through the end of 2014, including interest on the amount owed.
The FDIC initially sued Bank of America in 2017 for $1.12 billion, claiming that the bank has reduced its deposit insurance contributions by not following the new reporting guidelines. Despite Bank of America's denial of any intent to avoid payments, the court found the bank's argument insufficient, affirming the FDIC's actions.
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Bank of America has to pay following a FDIC lawsuit
According to Reuters, the rule, was public on April 14, and was part of broader federal reforms aimed at stabilizing the banking system and preventing another financial crisis like the one in 2008. The case is titled FDIC v. Bank of America NA, US District Court, District of Columbia, No. 17-00036.
In her 59-page decision, Judge AliKhan rejected Bank of America's argument that the rule lacked a reasonable basis and that the FDIC's actions were arbitrary. She clarified that the FDIC wasn't required to create a “perfect measure” of banks' potential exposure and that Bank of America's claims of not being adequately informed were unfounded.
AliKhan also noted that the FDIC waited too long to file the lawsuit regarding claims before the second quarter of 2013. However, Bank of America denied any intent to evade payments.
Bill Halding, a Bank of America spokesperson, said in a statement to Reuters: "We are pleased the judge has ruled and have reserves reflecting the decision".
The ruling, issued on March 31, was partially redacted, and Bank of America is expected to report its first-quarter results on Tuesday.