FDIC Sues Capital One in Dispute Over Special Assessment for 2023 Bank Failures

Another lawsuit has reportedly been filed in a dispute between the Federal Deposit Insurance Corporation (FDIC) and Capital One over how much the bank should pay to help bail out depositors of two financial institutions that failed in 2023: Silicon Valley Bank and Signature Bank.

The FDIC filed a lawsuit Monday (Nov. 17) alleging that Capital One paid nearly $100 million less than it should have to help with the bailout, Reuters reported Tuesday (Nov. 18).

The regulator said in its suit that Capital One underreported its uninsured deposits by excluding a $56 billion position between two subsidiaries, according to the report.

The FDIC uses deposit data to calculate the special assessments it charges banks to replenish its deposit insurance fund after bank failures, the report said.

The regulator alleged in its suit that Capital One’s exclusion of those uninsured deposits resulted in the bank calculating a special assessment at $324.84 million rather than the correct $474.08 million, per the report.

Capital One did not immediately reply to PYMNTS’ request for comment.

It was reported in September that Capital One sued the FDIC, alleging that the regulator overcharged the bank by $149.2 million during the special assessment.

Capital One alleged in its complaint that the FDIC inflated the assessment by incorrectly counting the $56.2 billion of positions between the bank’s subsidiaries as uninsured deposits.

The bank also said in its complaint that it had communicated with the FDIC about this issue for two years but that the regulated continued to seek the special assessment “based on its erroneous calculation.”

The FDIC announced in May 2023 that it planned to extract $15.8 billion in extra fees over two years to recoup its losses after the rescues of Silicon Valley Bank and Signature Bank.

The regulator said 113 banks would pay this special assessment, starting in early 2024, with those that have at least $50 billion in assets covering 95% of the cost. Banks with less than $5 billion in assets were exempt from the assessment.

The FDIC also said in May 2023 that the banking crisis had strained the government’s deposit insurance fund.