Bank of America will pay more than half a billion dollars after a district juditor had paid his deposit insurance costs for more than a year too little.
In 2017, the FDIC brought a lawsuit against BOFA due to alleged not -paid $ 1.12 billion in mandatory costs between Q2 of 2013 and Q4 of 2014.
The FDIC also accused Bofa of wrongly enriching itself by retaining the money.
According to the court case, Bofa did not accurately report its counterparty coats, which led to lower risk scores and lower insurance payments.
“In 2016, an FDIC -Audit revealed that ‘[BofA] had not consolidated his counterparty expansions at the ultimate parent level as required … ‘this reduced this [BofA’s] Concentration mate, which in turn considerably reduced the total amount that Bana paid in assessments for those quarters in assessments. “
Bofa argues that it correctly interpreted the correct regulations drawn up after the 2008 financial crisis to strengthen the stability of the banking system and to improve risk-based deposit insurement assessments.
The bank also claims that a fair notification of the interpretation of the FDIC of the rule was missing and the rule itself called ‘random and fickle and procedural inadequate’.
Judge Loren L. Alikhan of the American district rejected the most Bofa arguments while the claim was cut in two.
According to Alikhan, the rule is valid and that the FDIC was right to go after Bofas underpaid deposit insurance costs. However, the judge says that Bofa has to pay more than $ 540.26 million plus interest rather than the $ 1.12 billion requested by the supervisor.
‘The court agrees with the FDIC that, after reading the text of the 2011 rule and’ in good faith ‘, to act’, [BofA] should have been ‘identified'[] With a certainty to be established, it was expected that the standards would apply. ”
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Generated image: midjourney