Bank of America Faces FDIC in Court Over $1.1B Deposit Insurance Dispute
Bank of America will face the Federal Deposit Insurance Corp. (FDIC) in federal court on Tuesday. The hearing follows an amended complaint that increased the alleged underpayment of deposit insurance obligations to $1.1 billion. The case, initially filed in 2017, has seen delays, including due to COVID-19, and a recent denial of Bank of America's motion to dismiss.
The FDIC's lawsuit claims that Bank of America improperly miscalculated its exposure to large banks, making it appear less risky and resulting in lower deposit insurance assessments. This is the only such case among nine affected by the 2011 rule change. The bank's motion to dismiss the case was denied in 2018.
Magistrate Judge Moxila Upadhyaya will hear oral arguments on Tuesday for both sides' motions for summary judgment. Following this, Judge Emmet Sullivan will issue a final ruling after reviewing Upadhyaya's recommendations. Bank of America did not comment on the case, directing reporters to its public legal filings.
The hearing on Tuesday will determine the next steps in the ongoing dispute between Bank of America and the FDIC. The final ruling, following Judge Sullivan's review, will have significant implications for both parties and potentially the banking industry's deposit insurance obligations.
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