Jonathan Stempel
(Reuters) – The Federal Deposit Insurance Corp. filed a lawsuit accusing Capital One of paying nearly $100 million less than it should have to bail out depositors of Silicon Valley Bank and Signature Bank, which both went bankrupt in 2023.
Capital One was sued Monday night in federal court in Alexandria, Virginia, two months after the sixth-largest U.S. commercial bank filed its own lawsuit accusing the FDIC of trying to overcharge it for $149.2 million.
At issue is whether Capital One underreported its uninsured deposits by excluding a $56 billion position between two subsidiaries from regulatory reports describing the financial condition of the McLean, Virginia-based bank.
The Federal Deposit Insurance Corporation (FDIC) uses deposit data to calculate special assessments it charges banks to offset losses in its deposit insurance fund when banks fail.
Capital One had no immediate comment Tuesday. The FDIC did not immediately respond to requests for comment.
In its counterclaim, the FDIC said the exclusion of the $56 billion position resulted in Capital One calculating a special assessment of $324.84 million for the two bank failures, which was not the correct amount of $474.08 million. About $99.4 million remains unpaid, according to the FDIC.
“There are no time machines when it comes to special assessments, and the subsidiary's funds were deposits held at the bank for which the subsidiary had already received FDIC deposit insurance relief,” the FDIC said.
In July, Capital One estimated that it might need to commit an additional $200 million for this purpose.
The FDIC seized Silicon Valley Bank and Signature Bank in March 2023 and estimated last June that it would recover $18.6 billion from 111 banks through special assessments.
Banks with less than $5 billion in assets are exempt. The FDIC provides deposit insurance to 4,376 banks and savings associations.
In January, the FDIC filed a lawsuit against 17 former Silicon Valley Bank executives and directors in federal court in San Jose, California, seeking billions of dollars for alleged gross negligence and “breach of fiduciary duty.” This case remains pending.
(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)
