By Jonathan Stempel
(Reuters) – A federal decide ordered Financial institution of America to pay $540.3 million in a long-running Federal Deposit Insurance coverage Company lawsuit accusing the second-largest U.S. financial institution of underpaying what it owed for deposit insurance coverage.
In a call made public on Monday, U.S. District Choose Loren AliKhan in Washington, D.C., stated the cost covers assessments from the second quarter of 2013 by the tip of 2014, plus curiosity.
The FDIC sued Charlotte, North Carolina-based Financial institution of America for $1.12 billion in 2017, accusing it of lowering its deposit insurance coverage contributions by failing to honor a 2011 rule that modified how banks report danger publicity to counterparties.
That rule was one among many federal reforms designed to make sure the soundness of the banking system, and avert a repeat of the 2008 international monetary disaster.
In a 59-page resolution, AliKhan rejected Financial institution of America’s claims that there was no cheap foundation for the rule, and that the FDIC acted arbitrarily and capriciously.
AliKhan stated the FDIC was not required to develop a “excellent measure” of predicting banks’ potential publicity to losses, and Financial institution of America might declare it “lacked honest discover of what was required of it.”
She additionally stated the FDIC waited too lengthy to sue over claims predating the second quarter of 2013.
Financial institution of America strongly denied any intent to evade funds.
Invoice Halldin, a Financial institution of America spokesperson, stated in an announcement: “We’re happy the decide has dominated and have reserves reflecting the choice.”
The FDIC declined to remark.
AliKhan issued her resolution on March 31, and launched it in partially-redacted type.
Financial institution of America is anticipated to report first-quarter outcomes on Tuesday.
The case is FDIC v Financial institution of America NA, U.S. District Court docket, District of Columbia, No. 17-00036.
(Reporting by Jonathan Stempel in New York; Further reporting by Pete Schroeder in Washington, D.C.; Modifying by Leslie Adler and Aurora Ellis)
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