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Bank of America Ordered to Pay $540.3 Million After Losing FDIC Lawsuit
A federal judge has ruled that Bank of America must pay $540.3 million to the Federal Deposit Insurance Corporation (FDIC). The decision is the result of a long-running legal battle over how the bank calculated its deposit insurance payments more than a decade ago.
What the FDIC Accused the Bank Of
The FDIC sued Bank of America back in 2017, claiming the bank underpaid its required deposit insurance fees. The dispute centered on a 2011 rule change that required banks to report their risk exposure differently—by focusing on the parent company instead of smaller subsidiaries. This change was meant to give regulators a better understanding of how much financial risk a bank carried in total.
According to the FDIC, Bank of America’s reporting method reduced its insurance payments, leading to a shortfall of over $1.1 billion. The agency argued that the bank failed to comply with the updated regulation, which was designed to prevent a repeat of the 2008 financial crisis.
What the Judge Decided
On April 14, the judge ruled against Bank of America, rejecting the bank’s argument that the FDIC’s rule had no solid basis. The judge noted that the FDIC wasn’t required to come up with a perfect model to measure banks’ financial risks, only one that was reasonably reliable.
However, the judge also said the FDIC waited too long to file some parts of the lawsuit. As a result, Bank of America only has to pay for the underpayments made between the second quarter of 2013 and the end of 2014—totaling $540.3 million.
Bank of America Responds
A spokesperson for Bank of America, Bill Halldin, said the company was “pleased the judge has ruled” and added that the bank had already set aside reserves to cover the payment. He also maintained that the bank never tried to avoid making payments.
FDIC’s Regulatory Shift Under New Leadership
This ruling comes at a time of major change within the FDIC. Travis Hill, the agency’s acting chairman, has signaled a new direction for the FDIC since the start of 2025. Hill announced plans to review banking regulations and take a more flexible approach to financial innovation, including partnerships with FinTech companies and the use of digital assets.
Hill also said the agency would work to make it easier for new banks to enter the market and would support community banks by helping them manage rising technology costs.
In March, the FDIC issued new guidance allowing FDIC-supervised banks to take part in crypto-related activities without needing prior approval—if they can show they are managing the risks properly. This marked a change from the previous policy, which required banks to notify the FDIC in advance.
