FDIC Sues Capital One Over Special Assessment Charges Dispute

The Federal Deposit Insurance Corporation (“FDIC”) has filed a lawsuit against Capital One COF, alleging that the bank paid about $100 million less than it should have to help bail out depositors of Silicon Valley Bank and Signature Bank, which both collapsed in 2023. This was reported by Reuters.

The FDIC took control of Silicon Valley Bank and Signature Bank in March 2023 and estimated in June 2024 that it would recover $18.6 billion from 111 banks through special assessments. Banks with less than $5 billion in assets were exempted from these charges.

In sync with this, Capital One estimated in July 2025 that it might have to reserve an additional $200 million.

Details About the FDIC Lawsuit Against COF

The main concern of the dispute is whether Capital One understated its level of uninsured deposits by excluding a $56 billion position between two subsidiaries from regulatory filings that describe its financial condition.

The FDIC relies on banks’ deposit figures to determine the special assessments it imposes to recover losses to its deposit insurance fund after bank failures.

In its countersuit, the FDIC argued that leaving out the $56 billion balance caused Capital One to compute its special assessment at $324.84 million instead of the correct $474.08 million. The agency said roughly $99.4 million is still outstanding.

"There are no time machines when it comes to special assessments, and the subsidiary's funds were deposits held at the bank for which the subsidiary already received the benefit of FDIC deposit insurance," the FDIC said.

This lawsuit against Capital One comes just two months after the bank filed its own lawsuit accusing the FDIC of overcharging it by $149.2 million.

Capital One’s Past Legal Issues

The lawsuit adds to the company’s growing legal troubles. In September, a bipartisan group of 18 U.S. states proposed the rejection of COF’s $425 million settlement deal with depositors who accused the bank of using deceptive practices to make them think that they were earning the highest interest rate available from the company's online banking arm during the rising rate cycle.

In August, the New York Attorney General, Letitia James, filed a lawsuit against the Capital One-owned Zelle app, alleging that the payment platform failed to implement crucial safety measures, allowing fraudsters to steal more than $1 billion from consumers.

Capital One’s Price Performance & Zacks Rank

In the past six months, COF shares have risen 2.1% compared with the industry’s growth of 24.3%.

Currently, Capital One carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Regulatory Probes Faced by Other Banks

In September, UBS Group AG UBS agreed to pay €835 million ($986.8 million) to resolve a long-running French tax case concerning its cross-border business activities between 2004 and 2012.

UBS Group will pay a €730 million ($862.7 million) fine and €105 million ($124.1 million) in civil damages to the French state. The company stated that the matter is fully provisioned and its resolution is consistent with its strategy of addressing legacy issues in the best interests of all stakeholders.

Similarly, in August, Deutsche Bank AG DB was fined HK$23.8 million ($3.05 million) by Hong Kong’s Securities and Futures Commission (SFC) for multiple regulatory breaches, including fee overcharging, misclassification of product risk and failure to disclose investment banking relationships in research reports.

The disciplinary action stems from investigations triggered by Deutsche Bank’s self-reports submitted between December 2020 and December 2023. The SFC found that between November 2015 and November 2023, the bank overcharged clients approximately $39 million in management and custodian fees. These overcharges resulted from failure to apply discounted fee rates and misstatements in fund valuations.

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This article originally published on Zacks Investment Research (zacks.com).

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