Capital One Sues FDIC, Alleging Overcharge

Core Viewpoint - Capital One has filed a lawsuit against the Federal Deposit Insurance Corporation (FDIC), claiming it was overcharged by $149.2 million during a special assessment intended to recover losses from the collapses of Silicon Valley Bank and Signature Bank in 2023 [1][3]. Group 1: Lawsuit Details - The lawsuit alleges that the FDIC incorrectly classified $56.2 billion in positions between two Capital One subsidiaries as uninsured deposits, leading to an inflated assessment [3]. - Capital One has been in communication with the FDIC regarding this issue for two years, but the regulator continues to pursue the special assessment based on what Capital One claims is an erroneous calculation [3][4]. - The bank is seeking a judicial declaration that it does not owe the overcharged amount or any daily penalties for nonpayment [4]. Group 2: FDIC Special Assessment - The FDIC announced in May 2023 its plan to collect $15.8 billion in additional fees over two years to recover losses following the bank rescues [4]. - A total of 113 banks are expected to pay this special assessment starting in early 2024, with banks having at least $50 billion in assets covering 95% of the costs, while those with less than $5 billion in assets are exempt [5]. - The FDIC's quarterly banking profile indicated that the deposit insurance fund had $116 billion in assets, down from $128 billion in the previous quarter, with the ratio of assets to insured deposits dropping to 1.1%, below the legally mandated minimum of 1.3% [6]. Group 3: Industry Context - A Senate hearing titled "Evaluating Perspectives on Deposit Insurance Reform" was held to discuss the banking turmoil of 2023, emphasizing the need for modernization of the current deposit insurance system [6][7]. - Bank CEOs expressed that deposit insurance reform is urgently needed in light of the 2023 collapse of Silicon Valley Bank [7].