Katryna Perera
December 22, 2025
FDIC Says Capital One Is 'Turning Back Time' With Fee Fight
4 min
AI-made summary
- The Federal Deposit Insurance Corp
- (FDIC) has filed counterclaims against Capital One in a dispute over a $149 million special assessment related to the 2023 regional bank crisis
- Capital One argues that the FDIC wrongly included $56 billion in intercompany deposits in its assessment calculation, claiming these do not meet the statutory definition of 'deposit.' The FDIC alleges Capital One attempted to retroactively alter its 2022 deposit figures to reduce its assessment
- The case is pending in the Eastern District of Virginia.
The Federal Deposit Insurance Corp. has accused Capital One of trying to "turn back time" by retroactively distributing $56 billion and claiming it was erroneously included in the FDIC's fee calculations, in order to dodge roughly $99 million in special assessments tied to the 2023 regional bank crisis.
On Monday, the FDIC filed counterclaims and an answer to Capital One's complaint, saying "there are no time machines when it comes to special assessments." Capital One sued the FDIC in September, challenging a $149 million charge in a special assessment levied by the agency as part of an effort to recoup losses from the 2023 regional banking crisis.
The industrywide assessment at issue was intended to help the FDIC cover losses from the March 2023 failures of Silicon Valley Bank and Signature Bank, when the government committed to backstopping even their uninsured depositors to avert a deeper panic. The assessment has charged banks individually based on their reported levels of uninsured deposits at the end of 2022, before the crisis hit.
Capital One claims that it does not owe nearly a third of the $475 million special assessment the FDIC ordered it to pay, and that the agency improperly included as an uninsured deposit a roughly $56 billion intercompany position between Capital One and one of its wholly owned subsidiaries, Capital One Funding, and another $189 million intercompany position between the bank and another subsidiary, Capital One Auto Receivables.
Capital One says the intercompany positions should not have been included in the calculation because they do not meet the statutory definition of "deposit" under the Federal Deposit Insurance Act and were not reflected in the bank's reported levels of uninsured deposits at the end of 2022.
The bank claims it has demonstrated to the FDIC "in a series of communications" that the intercompany positions were wrongly included and that the $475 million invoice is incorrect.
The FDIC pushed back Monday, alleging that after it published its notice of proposed rulemaking announcing that it would recover the losses sustained by the 2023 banking failure through special assessments in May 2023, Capital One concluded that it would be ordered to pay a hefty amount based on the amount of uninsured deposits it had reported for 2022.
The bank then tried to avoid the forthcoming special assessment by declaring, in June 2023, a distribution of "nearly all" of the $56 billion deposit and retroactively dating it, according to the FDIC.
"Needless to say, a distribution that occurred in June 2023 would do nothing to reduce the amount of uninsured deposits reported on Capital One's 2022 call report unless Capital One somehow were able to turn back time. And that is precisely what Capital One claims to have done," the filing states. "When it declared the distribution on June 23, 2023, Capital One also claimed that it was retroactive with an 'effective date' of Oct. 1, 2022."
According to the FDIC, Capital One removed the $56 billion deposit from its 2022 report and claimed it was no longer a "deposit," even though relevant agreements previously identified the account holding the funds as FDIC-insured.
"Capital One claims that its subsidiary went back in time more than half a year and retroactively distributed most of those funds to Capital One so ... they no longer existed in the account on the relevant date for the special assessment," the filing states. "Capital One also now claims that the funds were never 'deposits' as that term is defined in the Federal Deposit Insurance Act. These arguments are simply wrong."
Capital One over the summer disclosed the assessment dispute to investors but did not have an exact figure of the alleged overage. According to the complaint, the dispute is currently at an impasse and therefore requires adjudication.
Capital One seeks declaratory judgment that the FDIC erroneously included the intercompany positions in its special assessment calculation, while the FDIC seeks a final judgment declaring that Capital One underpaid for its FDIC deposit insurance and violated the obligations of the special assessment rule.
The FDIC expects to recoup more than $19 billion through the special assessment, which began last year and is projected to continue into next year. Banks are paying the assessment in installments on top of the regular premiums they pay for deposit insurance.
Representatives for the parties did not immediately respond to requests for comment Tuesday.
Capital One is represented by John S. Moran, Bryan A. Fratkin and Juliet B. Clark of McGuireWoods LLP and John Gleeson, Helen V. Cantwell and Elliot Greenfield of Debevoise & Plimpton LLP.
The FDIC is represented by its own Sarah E. Paulson, Andrew A. Nicely and Jason Benton.
The case is Capital One NA v. Federal Deposit Insurance Corp., case number 1:25-cv-01515, in the U.S. District Court for the Eastern District of Virginia.
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Katryna Perera
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