Listen to this article

00:00
00:00

US financial regulators have more than doubled the sum they are demanding from Bank of America over allegations it short-changed the federal fund that insures depositors.

The Federal Deposit Insurance Corporation is now seeking about $1.1bn in a legal claim against the second biggest US bank by assets over unpaid premiums.

Officials argue BofA contributed less to the fund than it should have by misrepresenting to the FDIC the risks its poses to the financial system.

The FDIC uses a “risk-based” assessment system to determine the level of premium each bank must pay. Banks deemed to be at greater risk of collapse pay more.

The FDIC sued BofA back in January for $542m worth of unpaid premiums. At the time it said it reserved the right to invoice for at least $1bn. A filing from Bank of America on Tuesday confirmed the FDIC was now seeking an additional $583m. The additional sum covers another five quarters, back to the start of 2012.

In a lawsuit last month, the FDIC said it had “never before encountered a reporting failure that has caused such a large underpayment of assessments”.

Bank of America said: “We continue to believe that we are in compliance with the FDIC’s several rules, and we look forward to the court’s review.”

Copyright The Financial Times Limited 2017. All rights reserved.
myFT

Follow the topics mentioned in this article

Follow the authors of this article

Comments have not been enabled for this article.