FDIC Files Countersuit Claiming Capital One Underpaid in Bank Rescue Costs
The FDIC has launched a countersuit against Capital One, arguing the bank underreported uninsured deposits and underpaid its required contribution tied to the collapse of Silicon Valley Bank and Signature Bank.
The Federal Deposit Insurance Corporation has filed a countersuit claiming Capital One failed to pay the correct amount owed in special assessments tied to the 2023 failures of Silicon Valley Bank and
Signature Bank, reviving a dispute over how uninsured deposits were calculated during one of the largest rescue operations in recent U.S. banking history.
The agency said Capital One paid nearly $100 million less than it should have, arguing the bank excluded a major internal position between two subsidiaries when reporting uninsured deposits, reducing the calculation that determines how much each institution must contribute to replenish the deposit insurance fund after a bank failure.
Capital One, which previously filed its own lawsuit challenging the regulator’s assessment, maintains that the FDIC overestimated the proper amount by more than $149 million and applied a methodology that inflated the bank’s share of the burden for stabilizing the financial system.
The debate centers on whether a $56 billion balance between Capital One entities should be categorized as uninsured deposits for regulatory reporting. The FDIC argues the funds were held in accounts that benefited from deposit insurance, meaning they must be included in the calculation of special assessments used to recover losses.
According to the filing, excluding the internal position lowered the assessment figure from an expected $474 million to just under $325 million, leaving nearly $100 million unpaid and prompting the agency’s countersuit to recover what it views as the correct amount owed.
The regulator said there can be “no time machines” when recalculating assessments, insisting that the funds were insured deposits and that Capital One must bear its fair share of the cost of protecting depositors during the bank collapses that shook financial markets two years ago.
Capital One has not commented publicly on the countersuit, while the FDIC has also declined to issue additional statements beyond the legal filings, leaving the dispute to unfold in court as both sides defend sharply different interpretations of deposit reporting standards.
The agency uses deposit data to determine how much banks must contribute when failures lead to losses in the insurance fund, applying a system designed to ensure that institutions benefiting from protection bear the responsibility of restoring financial stability after systemic shocks.
Earlier this year, Capital One disclosed that it may need to set aside as much as $200 million more depending on the outcome of the legal process, reflecting the financial significance of the disagreement and the broader industry’s sensitivity to regulatory costs.
The FDIC initially seized Silicon Valley Bank and Signature Bank in March 2023, citing liquidity stress and rapid depositor withdrawals, and later estimated that more than $18 billion in expenses would need to be recovered through industrywide special assessments.
Banks with less than $5 billion in assets are exempt from these charges, placing the bulk of the obligation on larger institutions like Capital One, which is among the largest commercial banks in the United States with a significant national footprint.
The regulator is also pursuing separate legal action against former Silicon Valley Bank executives, accusing them of negligence and breach of duty, underscoring how fallout from the 2023 banking turmoil continues to generate regulatory scrutiny and legal consequences across the sector.
The Capital One case now represents one of the highest-profile challenges to how assessments are determined and may have broader implications for how banks classify internal transactions, uninsured deposits, and risk exposure in future regulatory frameworks.
With both parties standing firm in lengthy court filings, the legal battle is expected to continue shaping industry discussions about transparency, reporting accuracy, and the cost burden associated with safeguarding the U.S. financial system during periods of market stress.
