According to reports, a judge has ordered Bank of America to pay $540.3 million in a dispute where the Federal Deposit Insurance Corp. (FDIC) claimed the bank had underpaid for deposit insurance.
According to Reuters, the judge’s ruling was made public on Monday, April 14.
According to the newspaper, the FDIC filed a $1.12 billion lawsuit against firm of America in 2017 on the grounds that the firm had cut its deposit insurance contributions by disregarding a 2011 rule that altered how banks reported risk exposure to counterparties.
According to the study, Bank of America denied attempting to avoid payments.
According to the newspaper, the judge rejected the bank’s arguments that the rule lacked a logical foundation, ruling that the FDIC was exempt from having to provide a “perfect measure” for predicting banks’ possible loss risk.
The amount the bank was ordered to pay, according to the article, covers assessments from the second quarter of 2013 through the end of 2014 because the judge also decided that the FDIC filed its complaint too late to make claims before that time.
“We are pleased the judge has ruled and have reserves reflecting the decision,” stated Bill Halldin, a Bank of America representative, in the report.
This ruling was made at a time when the FDIC is rapidly changing, much like other regulatory organizations.
“Adopt a more open-minded approach to innovation and technology adoption, including (1) a more transparent approach to FinTech partnerships and to digital assets and tokenization, and (2) engagement to address growing technology costs for community banks,” stated Travis Hill, the FDIC’s new acting chairman, at the beginning of the new administration in January. Hill also promised to “conduct a wholesale review of regulations, guidance, and manuals.”
According to Hill, the FDIC would also want to “encourage more de novo activity so there is a healthy pipeline of new entrants in the banking sector.”
The FDIC issued new guidelines in March stating that, as long as they appropriately manage the risks involved, FDIC-supervised institutions are permitted to participate in crypto-related operations without first obtaining FDIC approval.
The FDIC formerly required prior notification of those operations under a now-rescinded guidance.
