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Bank of America (BAC) has been ordered to pay the Federal Deposit Insurance Corp. (FDIC) $540 million in a long-running legal dispute over deposit insurance assessments.
A federal judge ruled Monday that the bank was liable for “lawfully payable” assessments but stopped short of imposing the nearly $2 billion in penalties the agency originally sought.
The FDIC sued Bank of America in 2017, alleging the bank avoided payments under a 2011 post-financial crisis rule that redefined how banks report counterparty risk, a key metric used to calculate contributions to the federal insurance fund.
The agency initially sought approximately $1 billion in unpaid assessments and another $1 billion in alleged profits from underreporting risk.
Bank of America argued that it had not acted in bad faith, saying it disclosed its reporting methods to regulators and believed it had complied.
In the ruling dated March 31, U.S. District Judge Loren AliKhan concluded that Bank of America must make partial payments, including interest, but would not be required to forfeit any earnings.
The judge said the rule was “not ambiguous” and that the bank should have been able to understand and comply with it.
“We are pleased the judge has ruled and have reserves reflecting the decision,” Bill Halldin, a spokesperson for the bank, said in a statement. The FDIC has not yet issued a comment on the judgment.
Shares of Bank of America rose more than 4% Tuesday morning after the lender reported better-than-expected first-quarter (Q1) earnings.
Revenue climbed 6% year-over-year (YoY) to $27.4 billion, above Wall Street’s estimate of $26.91 billion. According to the company, growth was driven by higher net interest income and a rise in non-interest income across all business segments.
Bank of America's stock is down 13% in 2025 but has gained more than 5% over the past 12 months.
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