[Bank] (“X Bank” or “Bank”) filed this administrative appeal challenging a
January 28, 2002, determination by the Federal Deposit Insurance
Corporation’s (“FDIC”) Division of Finance (“DOF”) that the Bank’s claim for
a refund of assessment premiums was barred by the applicable five-year
statute of limitations. The Bank sought recalculation of assessment premiums
associated with its purchase of two branches of a savings bank in 1994.
Deposit runoff from those branches, the Bank contended, should have reduced
its insurance premiums by approximately $100,000, the refund amount it
In finding the Bank’s 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
The Bank submitted its claim to the FDIC by letter dated
October 24, 2001, from its Chairman and Chief Executive Officer, ***,
directed to the FDIC’s Office of the Ombudsman. According to the Bank, the
FDIC violated the plain language of the Oakar Amendment (12 U.S.C. §
1815(d)(3)) when it failed to provide the Bank with an annual “Growth
Worksheet” at the end of 1994. The Bank had made its initial Oakar
Transaction – acquisition of the savings bank branches – in June of 1994.
According to the Bank, it was entitled under the statute to a Growth
Worksheet at the end of 1994 through which it could have adjusted its
“Adjusted Attributable Deposit Amount” (“AADA”) to reflect deposit runoff
from the acquired branches. The Bank asserted that it was not provided with
a Growth Worksheet until the end of 1995, thereby losing the benefit of a
negative annual growth rate in 1994. That negative growth rate, according to
the Bank, would have lowered its AADA at the end of 1994 to a smaller figure
than actually reported at the end of 1995. For this reason, the Bank
maintained that it overpaid its assessments by $100,000, 1and it sought a
refund in that amount. In sum, X Bank made essentially the same AADA
argument raised by Y Bank and rejected by this Committee in In the Matter of
Y et al., AAC No. 99-04 (Sept. 27, 1999).
In its October 24, 2001, letter, the Bank referenced an
effort to communicate its claim to Mr. Leslie R. Crawford, the FDIC’s Deputy
Ombudsman, at the National Bankers Association’s 74th Annual Convention,
which took place October 9 through 12, 2001.
By letter dated January 28, 2002, the Director of DOF
responded to the Bank’s 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 Bank’s 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 Director’s 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,
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
The question of whether the Bank brought its claim within
the five-year statute of limitations of Section 7(g) may be resolved by
analysis of when the Bank’s claim “accrued,” i.e., when the statute of
limitations began to run, and when the claim was first brought. The
Committee analyzes these issues below.
A. Accrual of X Bank’s Claim
Section 7(g) of the FDIC Act, 12 U.S.C. § 1817(g),
provides the statute of limitations for the collection of unpaid or
erroneously collected deposit insurance assessments. Under section 7(g), an
action or proceeding for the recovery of any assessment due the FDIC, or for
the recovery of any excess amount paid to the FDIC, must be brought within
five years “after the right accrued for which the claim is made.” The
standard legal rule is that accrual occurs when the plaintiff has a complete
and present cause of action, i.e., when suit can be filed and relief
obtained. Bay Area Laundry and Dry Cleaning Pension Trust Fund v. Ferbar
Corp. of Calif., 522 U.S. 192, 201 (1997): Reiter v. Cooper, 507 U.S. 258,
267 (1993); Rawlings v. Ray, 312 U.S. 96, 98 (1941).
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 Bank’s 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 Bank’s 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.
Norwest court ruled that no AADA claim accrues where
an institution’s 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 Bank’s 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
To resolve this matter, the Committee must determine when
the Bank first brought its assessment claim. The elements necessary to put
an agency on notice of a claim may be gleaned by analogy from cases
analyzing the notice provision of the Federal Tort Claims Act (“FTCA”).
Under the FTCA, before bringing an action in court, a claimant “shall first
have presented the claim to the appropriate Federal agency ….” 28 U.S.C. §
2675(a). Courts have interpreted this provision to require filing with the
agency (1) a written statement sufficiently describing the inquiry to enable
the agency to begin its own investigation, and (2) a sum-certain damages
claim. GAF Corp. v. United States, 818 F.2d 901, 919 & n.106 (D.C. Cir.
1987) (U.S. Circuit Court cases cited).
Examination reveals that the Bank’s 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.
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.
The September 22, 1995 letter also meets none of the procedural requirements
of the then-current rules.
The Committee finds that X Bank’s 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 X’s claim
against the FDIC was first brought in its October 24, 2001 letter.
C. X Bank’s Claim Is Time Barred
The Committee resolves this matter by referring to two
dates: the accrual date of X Bank’s claim for an assessment refund and the
date the Bank first brought that claim to the FDIC. These dates must fall
within five years of each other or, under the five-year limitation period
contained in Section 7(g), the Bank’s claim is untimely.
X Bank’s 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 Bank’s 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
before the Bank brought this claim.
Accordingly, X Bank’s 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 Bank’s 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 Bank’s appeal.
1X’s AADA assessment payments have already been twice reduced notwithstanding
the assessments challenged here. The Bank received the permanent 20 percent
reduction in its AADA provided for in the Deposit Insurance Funds Act of
1996 (“DIFA”) (12 U.S.C. § 1815(d)(3)(K)), and also received the 20
percent DIFA reduction in its AADA for purposes of the 1996 SAIF Special
Assessment (12 U.S.C. § 1817 Note).
Y argued that the FDIC incorrectly withheld a Growth Worksheet at the end of
the year in which it conducted Oakar transactions. The Committee rejected
this contention as incompatible with the structure and purpose of the Oakar
Amendment, violative of the Amendment’s prohibition on inter-fund transfers
without payment of entrance and exit fees, and, coupled with the concept of
negative growth, unreasonable in result. Y’s claim of disparate treatment –i.e, other institutions had received Growth Worksheets that
incorrectly instructed them to report transactions that occurred within the
period of acquisition – was rejected: Y had no entitlement to inclusion in
an error. The FDIC later refunded overpayments and chose not to pursue
underpayments where errors had occurred.
The FDIC had allowed the Bank until April 19, 2002, to respond. When
nothing was received by that date, the Chief of the FDIC’s Assessment
Management Section telephoned *** to inquire whether the Bank intended to
respond, and *** indicated that a response would be forthcoming.
C.A. No. 00-1250 (D.D.C. July 6, 2001) (presently on appeal to the U.S.
Court of Appeals for the D.C. Circuit).
The oral communication, alleged to have occurred during the period from
October 9 to October 12, 2001, obviously fails the requirement of a writing.
In fact, September 22, 1995, is one week prior to the claim’s accrual
date calculated using the Norwest method.
7See 12 C.F.R. §
The other nine documents submitted with the September 22, 1995, letter lack
any relevance whatever to the issue presented here, i.e. the
timeliness of the Bank’s claim.
Even assuming that the Bank brought its claim by communicating it orally to
the FDIC’s Deputy Ombudsman between October 9 and 12, 2001, the claim would
still be untimely by more than a year.
The Norwest court considered a second statute of limitations, 28
U.S.C. § 2401(a), the six-year statute of limitations for civil actions brought
against the United States. The Committee believes that only Section 7(g)
governs FDIC assessment matters because: (1) the five-year period specified
in Section 7(g) contradicts Section 2401(a)’s six-year period; (2) Section
7(g)’s five-year limitations period would be superfluous were Section
2401(a) to control; (3) Section 7(g)’s specific limitations period
supercedes Section 2401(a)’s general limitations period; and (4) Section
7(g) is the more recent enactment of the two. In any case, the Committee
notes that X Bank’s claim was not brought within six years, the limitations
period of Section 2401(a), under either accrual method discussed in this