FDIC Lawsuit
On September 17, 2025, the 8th Circuit Court of Appeals released its opinion in our MBA and Lake Central Bank’s lawsuit against the FDIC. The opinion affirmed the district court’s decision dismissing our lawsuit against the FDIC on technical grounds that our claims were not ripe. We are disappointed with that decision, which means we will not be able to argue the merits of this case. We felt we had a strong argument that the FDIC’s FIL 40, replaced by FIL 32 (the FILs) , were issued as guidance documents, but were in fact binding rules because they contained new requirements and had consequences.
Our best argument was that the FILs required FDIC-regulated banks to provide new disclosures that were not otherwise required by the tens of thousands of pages of banking laws and regulations. And those newly required disclosures mattered because the FDIC was citing banks for a deceptive UDAP violation. A deceptive UDAP violation is a failure to provide required information, and a determination that the omission of the information is material. The violation cited by the FDIC was a failure to provide the newly required disclosures outlined in the FILs. If the FILs were just guidance, how could the FDIC cite banks for failing to provide those new disclosures that first appeared in the FILs?
Unfortunately, the court did not agree with that argument. The court concluded that the FILs contained suggestions only, not requirements. The court also concluded that the FDIC did not rely on the FILs to bring enforcement actions.
While we are disappointed that the court did not allow this case to proceed, we had already won simply by filing this lawsuit. Right after we filed, the FDIC changed its enforcement position on this issue. To make the argument to the courts that the FILs were not binding rules, the agency had to ensure there were no consequences attached to the FILs. They ensured there were no consequences by no longer examining banks for this issue and citing banks for the UDAP violation described in the FILs. The agency went from a very aggressive enforcement position on this issue to no enforcement whatsoever, basically overnight. The FDIC’s statements in court will prevent the agency from ever changing back to its aggressive enforcement position in the future.
We achieved our goal of protecting banks from regulatory action on this issue, even though we were not allowed to argue this case on its merits. Winning on the merits was always our goal, but the FDIC essentially won this lawsuit by choosing to lose their enforcement authority on this issue.
We are continuing to digest the court’s opinion, and we will provide more information at a later date.
Complaint
FDIC Response
MBA's Amended Complaint
FDIC Motion to Dismiss
Plaintiff's Memorandum
FDIC Reply Memorandum
Order Granting Motion to Dismiss
Appellants' Brief
Amicus Brief American Bankers Association
Amicus Brief Missouri Bankers Association
Amicus Brief ITS, Inc.
Filed Brief for Defendants-Appelleest
Appellant Reply Brief
U.S. Court of Appeals Decision