Federal Deposit Insurance Corporation v. Bank of America, N.A., Civil Action No. 2017-0036

Background

After Dodd‑Frank, the FDIC promulgated a 2011 Rule that used HCI scorecards (performance × loss‑severity) to set risk‑based deposit insurance assessments. The HCI scorecard included Top‑20 and Largest Counterparty Exposure measures defined to be reported “at the consolidated entity level.”
From 2Q2011–2015 HCIs submitted quarterly Call Reports; FDIC issued clarifying Call‑Report instructions (June 2011; Mar. 2012) and a Dec. 2011 Notice emphasizing reporting on a legal consolidated (fully consolidated) basis.
A 2016 FDIC audit found BANA did not consolidate counterparty exposures to counterparties’ ultimate parents for many quarters (1Q2012–4Q2014), lowering BANA’s concentration measures and undercutting assessments; FDIC invoiced $1.120B; BANA refused to pay.
FDIC sued (Jan. 2017) under 12 U.S.C. § 1817 for unpaid assessments and unjust enrichment; BANA counterclaimed under the APA challenging the 2011 Rule.
Following cross‑motions for summary judgment (post‑Loper Bright), the court upheld the 2011 Rule, construed “consolidated entity level” to require consolidation to the counterparty’s ultimate parent, rejected BANA’s fair‑notice and equitable defenses, found earlier quarters time‑barred, and entered judgment for the FDIC for $540,261,499.90 (2Q2013–4Q2014) plus interest.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Validity of 2011 Rule under FDIA/APA	Rule is within FDIC’s broad statutory discretion and based on reasoned, evidenced rulemaking	Scorecards improperly weight factors; models and validation flawed; procedural defects	Rule valid: FDIC acted within FDIA authority and engaged in reasoned decisionmaking; validation and notice adequate
Meaning of “consolidated entity level” for counterparty exposure	Plain/technical meaning requires consolidation to counterparty’s ultimate parent; Call Report instructions and notice confirm	Term ambiguous; accounting consolidation requires elimination only of intra‑group items (BANA need only consolidate its own subsidiaries)	Unambiguous: requires consolidation to ultimate parent level on counterparty side; FDIC interpretation adopted
Fair‑notice / retroactive liability for pre‑audit reporting	BANA had notice from the rule text, instructions, and notices	Industry confusion and later 2014 wording change show lack of fair notice	Fair notice satisfied: regulated parties acting in good faith could ascertain requirements; BANA’s failure to read guidance undermines defense
Statute of limitations & discovery (timeliness of claims)	FDIC: revised invoices and discovery‑rule tolling (fraud/intent to evade) make 1Q2012–1Q2013 claims timely	BANA: original due dates control; FDIC had inquiry notice by May 2012	Statute bars claims for 1Q2012–1Q2013. FDIC had inquiry notice by May 2012; only 2Q2013–4Q2014 recoverable
Remedies — unjust enrichment/disgorgement	FDIC seeks disgorgement in addition to statutory recovery	BANA: FDIA §1817(g) provides adequate legal remedy; disgorgement unnecessary and extraordinary	Equitable disgorgement denied: FDIC has adequate statutory remedy (recover unpaid assessments + interest); §1817(h) savings clause does not override equity rules
Equitable defenses (estoppel/acquiescence/waiver)	BANA asserts these defenses based on FDIC conduct and notice failures	FDIC contends such defenses rarely run against government and are unsupported here	Defenses rejected: BANA failed to show egregious government misconduct or elements of estoppel/acquiescence/waiver

Key Cases Cited

Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) (courts must exercise independent judgment reviewing agency statutory authority; overruled Chevron deference)
Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (longstanding agency‑deference framework discussed and now displaced by Loper Bright)
State Farm Mutual Automobile Insurance Co. v. Motor Vehicle Manufacturers Association, 463 U.S. 29 (1983) (arbitrary and capricious / reasoned‑decisionmaking standard)
Norwest Bank Minn. Nat'l Ass'n v. Federal Deposit Insurance Corp., 312 F.3d 447 (D.C. Cir. 2002) (statute‑of‑limitations accrual tied to the original wrong/due date)
Doolin Sec. Sav. Bank, F.S.B. v. Federal Deposit Insurance Corp., 53 F.3d 1395 (4th Cir. 1995) (FDIA grants FDIC broad discretion to consider "any other factors" when setting assessments)
Heckler v. Community Health Services of Crawford County, Inc., 467 U.S. 51 (1984) (limits on asserting equitable estoppel against the government)
General Electric Co. v. Environmental Protection Agency, 53 F.3d 1324 (D.C. Cir. 1995) (fair‑notice principle: regulated parties must be able to identify standards with ascertainable certainty)
Merck & Co. v. Reynolds, 559 U.S. 633 (2010) (statutory discovery rule and accrual principles for fraud claims)