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Deposit Insurance Assessment Appeals: Guidelines & Decisions
AAC-2002-04 (July 18, 2002)
In finding the Banks claim untimely, DOF did not address the underlying merits of the claim, nor does the Assessment Appeals Committee (Committee) consider them here. The sole issue to be determined in this appeal is whether the Bank brought its claim within the five-year limitations period for assessment matters prescribed by Congress in the Federal Deposit Insurance Act (FDI Act). Resolution of that issue requires an analysis of (1) when the Bank first brought its claim, and (2) when the claim accrued, that is, when the five-year statute of limitations began to run.
In its October 24, 2001, letter, the Bank referenced an effort to communicate its claim to Mr. Leslie R. Crawford, the FDICs Deputy Ombudsman, at the National Bankers Associations 74th Annual Convention, which took place October 9 through 12, 2001.
By letter dated January 28, 2002, the Director of DOF responded to the Banks claim that the FDIC withheld a Growth Worksheet from the Bank in 1994. The Director informed X Bank that the five-year statute of limitations for assessments had run, that the Banks claim was untimely, and that the FDIC would not consider it. The DOF Director provided instructions for filing an appeal to this Committee.
By letter dated March 8, 2002, the Bank opted to appeal the Division Directors determination to this Committee. In that letter, the Bank contended that it had pursued the FDIC over a 5 year period seeking to recover adjustments due to overpayments for the actual purchases of branches and for relief or reductions in a loan that was extended by the RTC/now FDIC. The FDIC, by letter dated April 5, 2002, requested from the Bank any documentation it had supporting the contention that it had pursued its claim with the FDIC over a five-year period.
The Bank responded on May 1, 2002, 3 with a package of ten documents. Nine of these documents related to an Interim Capital Assistance note restructuring that the Bank arranged with the FDIC. The tenth document, a September 22, 1995, letter from Mr. *** to then-FDIC Chairman Ricki Helfer, contained a reference to the deposit runoff from the 1994 savings bank acquisitions. In that letter, Mr. *** asserted, As you can see, we feel that the assessment being debated is unfair, and will have a serious impact on our earnings.
By letter dated May 24, 2002, the Bank was notified that the appeal record was complete and that the Committee would issue a decision.
A. Accrual of X Banks Claim
The appropriate accrual date for AADA matters is established by identifying the alleged calculation error and then determining which semiannual assessment it first affected. On this basic point, X Bank directs us to the end of December 1994 when, the Bank asserts, the FDIC erred by not providing a Growth Worksheet. Because of that alleged error, the Bank contends that its AADA its Bank Insurance Fund (BIF)/ Savings Association Insurance Fund (SAIF) ratio was allegedly miscalculated. The calculations from any such 1994 worksheet would have been reflected on the Banks Certified Statement due January 31, 1995. At that time, however, the Bank attested that its assessment base for the second semiannual period in 1994 the base on which its January 31, 1995, assessment amount was computed was true, correct and complete, and the Bank paid that assessment. Now, over six years later, X Bank contends that its 1994 assessment base was wrong, resulting in an overpaid SAIF assessment. The Committee finds that the accrual date for this claim was January 31, 1995, when the Banks alleged SAIF overpayment was first due.
The Committee turns to an alternate, and we think incorrect, method of calculating AADA claim accrual dates applied recently in Norwest Bank Minnesota, N.A. v. FDIC. 4 The Norwest court ruled that no AADA claim accrues where an institutions BIF/SAIF ratio is incorrect, so long as the two funds assessment rates remain the same. Instead, the court viewed an AADA claim as accruing only when the institution allegedly overpaid its combined BIF/SAIF assessment, which would result when the funds assessment rates diverged. Before divergence, the court apparently viewed the alleged SAIF overpayment as, in effect, an offset against the alleged BIF underpayment. In this way, the court tacitly and erroneously treated the BIF and SAIF as one fund. Thus, regardless of any error in BIF/SAIF apportionment, the Norwest court would not start the limitations clock running as long as the total combined BIF/SAIF assessment remained correct. Under this approach, had the BIF and SAIF rates never diverged, the statute of limitations for Banks claim would not yet have begun to run. We think the Norwest court was wrong.
Nevertheless, using the Norwest approach, the date of the first alleged overpayment by the Bank of its combined BIF/SAIF assessment can be precisely identified in FDIC records as September 29, 1995. On that date, the Bank paid its semiannual assessment, computed by applying BIF rates that were lower than SAIF rates. Accordingly, September 29, 1995, is the accrual date that would be found applying the Norwest approach.
B. When the Bank Brought Its Claim
Examination reveals that the Banks October 24, 2001, letter meets these requirements.5 In the letter, the Bank set out its AADA calculation theory and valued its claim at $100,000. The Bank, however, points to the September 22, 1995, letter from *** to former Chairman Helfer as evidence that its claim was first brought more than six years earlier. 6 The Committee finds nothing in the September 22, 1995, letter to suggest that the letter is anything more than a lobbying effort on the part of the Bank in opposition to legislation to impose a special SAIF assessment then being considered in Congress. Indeed, the letter on its face fails to meet the minimal requirements for submission of a claim: notice of a claim is not provided nor is any refund requested. Moreover, in September of 1995, as now, FDIC regulations set forth the explicit procedures for requesting revision of assessment payment computations. These rules provided what to submit, when to submit it, and the officer to whom it should be addressed. 7 The September 22, 1995 letter also meets none of the procedural requirements of the then-current rules. 8
The Committee finds that X Banks September 22, 1995 letter failed to bring a claim against the FDIC. The letter therefore can have no effect on the statute of limitations issue presented here. Rather, the evidence in this matter supports the conclusion that Bank Xs claim against the FDIC was first brought in its October 24, 2001 letter.
C. X Banks Claim Is Time Barred
X Banks claim accrued on January 31, 1995, when its first alleged SAIF overpayment was due. As of that date, if X Bank believed an error in its AADA calculation had occurred, it could have pursued that error with the FDIC. Instead, the Bank waited until October 24, 2001 almost six years and nine months later before doing so, well beyond the five-year statutory period. Nor is the claim timely even applying the Norwest approach. Under that calculation, the Banks claim would have accrued on September 29, 1995, when it first paid assessments based on divergent BIF and SAIF rates. Applying that accrual date, six years and twenty-five days elapsed9 before the Bank brought this claim. 10
Accordingly, X Banks claim was not brought within five years of its accrual as required under Section 7(g), 12 U.S.C. § 1817(g), the statute of limitations for FDIC assessment matters. The Committee therefore finds that X Banks claim is time barred.
For the reasons discussed herein, under the authority delegated by the Board of Directors of the Federal Deposit Insurance Corporation, the Committee denies Banks appeal.
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