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Bank of America sued over unpaid $542m deposit insurance

Published 11 January 2017

The US Federal Deposit Insurance Corporation (FDIC) has filed a lawsuit against Bank of America, accusing it of refusing to pay $542m in deposit insurance.

According to the agency, the banking giant did not take notice of its instructions on accounting its exposure to counterparties.

However, Bank of America said that it complied with the FDIC rules, Bloomberg reported.

The bank was quoted by the publication as saying: “The amount in question, derived from a technical disagreement about a calculation from several years ago regarding a rule that has had changing provisions over time, comprises a fraction of what we annually pay to the FDIC.”

 Bank of America said in a statement that it informed the FDIC on its calculations on a regular-basis.

It said that the issue should be settled through discussions rather than approaching a court.

The FDIC said that the lawsuit is its first against a bank in over two decades to recover insurance charges.

Bank of America is only bank among nine that did not disclose the counteryparty exposure, the agency said.

The bank was quoted by CNN as saying: "We look forward to the court's review.”

Eugene Scalia, a lawyer who represents Bank of America, said that the FDIC "received reports from the bank each quarter which made crystal clear what approach the bank was taking.

Bank of America and the FDIC had held discussions about the matter.

Scalia said: "They agreed to provide us additional information, but recently they indicated that they felt they must file suit by mid-January.”

Image: The Bank of America Tower in New York City. Photo courtesy of User Jleon/Wikipedia.