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.

The U.S. Securities and Exchange Commission has approved Dimensional Fund Advisors’ plan to introduce ETF share classes on 13 mutual funds, marking a major shift in the investment landscape and opening the door for similar applications across the asset-management industry.

The U.S. Securities and Exchange Commission has approved Dimensional Fund Advisors’ request to introduce an ETF share class attached to 13 of its existing mutual funds.

The decision marks a significant shift in the asset-management landscape, allowing DFA to enter a space that has remained largely unchanged for more than twenty years.

The regulator’s notice, released late Monday, removes the final obstacle for DFA as it seeks to expand its product lineup through the ETF structure.

This approval also sets the stage for similar applications by other firms now waiting for the same regulatory green light.

The model draws attention because it mirrors a framework long used by Vanguard, which held the only ETF share class patent in the U.S. until its expiry in 2023.

With that patent no longer in place, asset managers have moved quickly to explore the advantages of linking mutual funds and ETFs under a shared structure.

DFA filed its application soon after the patent lapse, with the SEC offering preliminary support in September.
The firm proposed ETF share classes for 13 mutual funds, though insiders suggest the full rollout may be gradual rather than immediate.

The first launches are expected no earlier than 2026, indicating a measured approach to implementation.
This timeline highlights the complexities involved in operational planning, marketing, and investor education across both fund structures.

Industry voices say the move could reshape how investors think about accessing long-held mutual fund strategies.
They argue that adding ETF share classes may deliver cost efficiencies, reduced tax burdens, and simplified portfolio construction.

Eric Pan, president of the Investment Company Institute, welcomed the step as one that could offer “meaningful benefits to mutual fund shareholders.”

He emphasized that a dual-structure approach may help unify distribution systems and reduce administrative overhead for providers.

Supporters of the model also point to the explosive growth of the ETF market, which continues to outpace traditional mutual funds in inflows.

By expanding ETF accessibility, issuers hope to retain investors who prefer the liquidity and flexibility of exchange-traded products.

Gerard O’Reilly, co-CEO and co-CIO of DFA, said the development empowers investors to choose strategies based on long-term goals rather than structural limitations.

He noted that offering different wrappers around the same strategy improves investor autonomy and increases competitive choice.

The SEC’s approval represents more than an operational milestone.
It signals a broader regulatory openness toward innovations designed to modernize the fund ecosystem.

For other asset managers, this ruling may function as a blueprint for future filings. Dozens of firms have already sought permission to replicate the ETF-mutual-fund share class structure, anticipating increased market competition.

Despite the momentum, analysts say adoption will depend on each firm’s ability to balance costs, tax considerations, and operational complexity.

Even with advantages, navigating the dual-share-class environment requires strong backend systems and transparent investor communication.

Still, the decision is widely viewed as a turning point for an industry adapting to new expectations around accessibility and efficiency.
As the ETF market expands globally, hybrid models like these may shape the next generation of fund offerings.

For investors, the approval offers the potential for broader access to strategies once limited to mutual fund formats.
The evolving landscape may bring more choice, more flexibility, and a wider range of low-cost options across asset classes.

As the financial industry continues to shift toward innovation and investor-centric design, DFA’s new ability to launch ETF share classes marks a milestone moment. The market will be watching closely as the first products approach their expected rollout in early 2026.