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Bank says FDIC inflated assessment by $149.2 million

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Sixth-largest US commercial bank sued in Virginia

By Jonathan Stempel

Sept 11 (Reuters) - Capital One sued the Federal

Deposit Insurance Corporation, accusing the U.S. regulator of

imposing an excessive $474.1 million special assessment to

recoup losses to its deposit insurance fund following the

collapses of Silicon Valley Bank and Signature Bank in 2023.

According to a complaint filed on Wednesday in federal court

in Alexandria, Virginia, the FDIC incorrectly counted $56.2

billion of positions between two Capital One subsidiaries as

uninsured deposits, improperly inflating the assessment by

$149.2 million.

The sixth-largest U.S. commercial bank said the FDIC "persists

in seeking to collect a special assessment based on its

erroneous calculation," despite two years of communications

showing its math is wrong.

Capital One, based in McLean, Virginia, said the dispute is

at an impasse, and a judge should declare that it does not owe

the $149.2 million plus daily penalties for nonpayment.

Capital One estimated in July that it may need to set aside an

additional $200 million for the matter.

FDIC spokesman Brian Sullivan declined to comment on

Thursday. Capital One also declined to comment.

Silicon Valley Bank and Signature Bank were seized by the

FDIC in March 2023, prompting fears of a replay of the 2008

global banking crisis. Another large bank, First Republic Bank,

failed in May 2023.

As of June 30, the FDIC estimated it would recover $18.6 billion

from 111 banks through a special assessment for the Silicon

Valley Bank and Signature Bank failures. Banks with less than $5

billion of assets are not subject to the assessment.

The FDIC sued 17 former Silicon Valley Bank executives and

directors in January, seeking billions of dollars for alleged

gross negligence and breaches of fiduciary duty. That case

remains pending.

The case is Capital One NA v FDIC, U.S. District Court,

Eastern District of Virginia, No. 25-01515.