FDIC files counterclaim against Capital One in special assessment case

This week the Federal Deposit Insurance Corp. filed a counterclaim against McLean-based Capital One, National Association, which is suing the FDIC over its 2023 special assessment of $474 million, which the bank claims is a major overcharge.

The FDIC claims in its Nov. 17 filing that Capital One, National Association, a national bank and subsidiary of Capital One Financial Corp., has withheld payment of about $99.4 million it allegedly owes the federal government, part of the $474 million assessed after the March 2023 failures of Silicon Valley Bank and Signature Bank.

According to Capital One’s lawsuit filed in the U.S. District Court of the Eastern District of Virginia in September, the FDIC improperly charged the bank about $149 million of the $474 million after the federal insurer took action to protect the two failed banks’ insured and uninsured depositors, using funds from the Deposit Insurance Fund.

As one of the nation’s largest FDIC-insured banks, Capital One was assessed $474 million in November 2023 to help replenish the FDIC’s insurance fund for emergencies, but that amount was “outsized and improperly calculated,” the bank alleges in its complaint.

Capital One argues that the federal special assessment rule, which the FDIC employed to determine the amount assessed to the bank, was supposed to use the uninsured deposit amount on the bank’s revised December 2022 call report. Instead, the FDIC used the intercompany position — a statistic not listed on the call report — and charged the bank a higher amount. An intercompany position refers to financial exchanges between two or more legal entities within a parent company.

The FDIC says in its counterclaim that Capital One has withheld $99.4 million of the special assessment “because it claims that funds of one of its subsidiaries … are not subject to the special assessment.”

Both Capital One and its subsidiary “identified $56 billion in funds as deposits at the time, and the subsidiary received the benefit of FDIC deposit insurance on these funds up to applicable limits. Nevertheless, [Capital One] now claims that these funds should not be counted as deposits for purposes of calculating … special assessments,” the counterclaim alleges.

It’s not clear why the two amounts — the $149 million Capital One says it does not owe the FDIC and the $99.4 million the FDIC claims the bank owes — differ. Capital One did not respond immediately to requests for comment Thursday, and an FDIC spokesperson said it had no comment beyond its counterclaim.