Bank of America Ordered to Pay $540M in FDIC Lawsuit

A federal judge ordered Bank of America to pay roughly $540 million to the Federal Deposit Insurance Corporation in the FDIC lawsuit that had been pending since 2017, resolving claims that the bank underpaid deposit insurance premiums between 2013 and 2014. Judge Loren AliKhan of the U.S. District Court for the District of Columbia issued the partial summary judgment on March 31, 2025. The FDIC had sought $1.12 billion; the statute of limitations cut the recovery roughly in half.¹²

What Bank of America Was Accused of Doing

The dispute traces back to a 2011 FDIC rule that changed how the largest banks were assessed for deposit insurance. Under the new scorecard system, “highly complex institutions” had to report their counterparty exposure, meaning how much they stood to lose if a major trading partner defaulted. The rule required banks to measure that exposure at the “consolidated entity level,” rolling up all exposures to a counterparty’s subsidiaries and affiliates to its ultimate parent company. Higher aggregated exposures translated into a riskier profile and higher premiums.

The FDIC alleged that Bank of America did not aggregate at all. Instead, it reported only its direct exposures to individual entities, which made its risk scores look lower and its premiums smaller. Of the nine banks subject to the requirement, Bank of America was the only one that “did not consolidate its exposures in any manner whatsoever,” according to the FDIC’s complaint.³ The agency also noted that Bank of America’s own parent holding company had applied the same kind of consolidated reporting in a Federal Reserve Bank of New York program since 2008.

After the bank submitted corrected counterparty figures in December 2016, the FDIC invoiced it for about $542 million in underpaid assessments plus interest. Bank of America refused to pay, and the FDIC sued in January 2017.³

Why the Judgment Was $540 Million, Not $1.12 Billion

The FDIC later amended its complaint to add a $583 million unjust enrichment claim covering additional quarters, bringing the total sought to $1.12 billion.⁴ Two rulings within the judgment brought the number down.

The larger cut came from the statute of limitations. The Federal Deposit Insurance Act requires the FDIC to sue within three years of an assessment’s due date. Because the FDIC did not file until January 2017, claims for underpayments from the first quarter of 2012 through the first quarter of 2013 were time-barred. Only the assessments from the second quarter of 2013 through the fourth quarter of 2014 survived.²

The court also rejected the FDIC’s separate request for disgorgement based on unjust enrichment, ruling that pre-judgment interest was an adequate remedy.⁵

How the Court Handled the Bank’s Defenses

Bank of America argued that the 2011 rule was unclear about what “consolidated entity level” meant, treating the phrase as an accounting term that referred to consolidation within its own corporate structure rather than an instruction to aggregate across a counterparty’s corporate family. It also argued that the FDIC’s rulemaking violated the Administrative Procedure Act because the agency had not adequately explained what it expected.⁶

Judge AliKhan found the rule unambiguous. “Consolidated entity level” required aggregating exposures across a counterparty’s entire corporate family to the ultimate parent, and Bank of America had failed to do so. Applying the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, which eliminated Chevron deference, the court independently reviewed the FDIC’s statutory authority and concluded the agency had acted within its powers under the Federal Deposit Insurance Act. The 2011 rule was neither arbitrary nor capricious.²

Earlier in the case, Judge Emmet Sullivan had denied Bank of America’s motion to dismiss, finding it plausible that the bank “acted with intent to evade assessments.” Sullivan pointed out that the same compliance group handled reporting for both the bank and its parent corporation, and the parent had reported in the consolidated way the FDIC now demanded.⁴

The bank has maintained that it complied with a revised 2014 version of the deposit insurance rule, which it did not challenge in the lawsuit.⁶

Interest and What Happens Next

With liability settled, the court moved on to interest. In an April 2026 opinion, Judge AliKhan ruled that pre-judgment interest would be calculated using the rate in the FDIC’s own regulations, pegged to the three-month Treasury bill rate. That rate, she found, best approximated both what Bank of America had available while it held onto the money and what the FDIC lost by not having it. Post-judgment interest follows the standard federal rate under 28 U.S.C. § 1961(a). The parties were ordered to file a joint status report with interest calculations by April 14, 2026.⁵

A Bank of America spokesperson said in April 2025 that the bank was “pleased the judge has ruled” and that it had “reserves reflecting the decision.”² The bank declined to say whether it will appeal. The judgment showed up in first-quarter 2025 results as part of a 6 percent quarter-over-quarter rise in non-interest expenses to $17.8 billion, with CFO Alastair Borthwick attributing part of the increase to higher litigation costs “related to a recent decision in a long-running matter.”⁷

1
Yahoo Finance. Judge Orders Bank of America to Pay $540 Million in FDIC Lawsuit
2
ABA Banking Journal. Bank of America to Pay FDIC $540M for Allegedly Underpaid Premiums
3
Wolters Kluwer. FDIC v. Bank of America Complaint
4
Courthouse News Service. Bank of America Dealt Blow in FDIC Lawsuit Over Deposit Insurance Payments
5
Wolters Kluwer. FDIC v. Bank of America Memorandum Opinion and Order on Interest
6
Bloomberg Law. FDIC, Bank of America to Resume Billion-Dollar Insurance Fight
7
Banking Dive. Bank of America FDIC $540 Million Risk Lawsuit