Bank of America Pays $540M in FDIC Lawsuit

Bank of America Hit with $540 Million Bill in FDIC Lawsuit

A federal judge has ordered Bank of America to cough up $540.3 million to settle a long-running dispute with the Federal Deposit Insurance Corporation. The case, which kicked off back in 2017, centers on claims that the bank underpaid its deposit insurance fees.

What Sparked the Lawsuit?

The FDIC accused Bank of America of dodging proper payments by not following a 2011 rule on how banks report risk exposure to counterparties. This rule was part of a broader push to keep the banking system stable after the 2008 financial crisis. The FDIC originally sought $1.12 billion, arguing the bank’s missteps reduced its contributions to the deposit insurance fund from mid-2013 to the end of 2014.

The Judge’s Ruling

U.S. District Judge Loren AliKhan in Washington, D.C., made the call on March 31, with the decision going public on April 14, 2025. She ruled that Bank of America owes the $540.3 million for underpayments during that 2013-2014 period, plus interest. However, she also said the FDIC waited too long to chase claims before mid-2013, which cut down the final amount.

In her 59-page decision, AliKhan dismissed Bank of America’s argument that the FDIC’s rule lacked a solid basis. She made it clear the agency didn’t need to create a perfect system for measuring risk—just one that made sense.

Bank of America’s Response

Bank of America didn’t admit to any wrongdoing. Spokesman Bill Halldin said the bank was glad the judge finally ruled and noted they’d already set aside cash to cover the payment. The bank argued it acted in good faith, but the court wasn’t convinced they followed the rules properly.

This ruling is a big deal because it shows regulators are still cracking down on banks to make sure they’re playing fair with deposit insurance. That fund is what protects customers’ money if a bank goes under, so underpaying it could weaken the safety net. Plus, with Bank of America being the second-largest bank in the U.S., the case got a lot of attention.

The timing’s interesting too—the decision dropped right before Bank of America’s first-quarter earnings report on April 15, 2025. Investors are probably keeping a close eye to see how this fine might affect the bank’s bottom line.

For now, Bank of America’s on the hook for the $540.3 million, and it sounds like they’re ready to pay up without much fuss. The FDIC didn’t comment on the ruling, but they’ve got to be feeling some relief after eight years of legal back-and-forth. This case might also remind other banks to double-check their own reporting to avoid similar headaches.