August 21, 2019

Tenth Circuit: FDIC Bank Account Determinations Not Arbitrary or Capricious and Followed Controlling Regulations

The Tenth Circuit Court of Appeals issued its opinion in Aviva Life and Annuity Co. v. FDIC on Tuesday, August 16, 2011.

The Tenth Circuit affirmed the district court’s decision. Petitioner contends that the FDIC acted arbitrarily and capriciously in rendering insurance determinations concerning certain bank accounts of Petitioner. Specifically, Petitioner claims that the FDIC made the determinations without the appropriate review, and urges the court to “ascertain whether the agency examined the relevant data and articulated a rational connection between the facts found and the decision made. . . . Presumably, they mean to say that the extrinsic evidence allegedly considered by the FDIC in forming its intermediate determinations constitutes ‘relevant data’ and that it was incumbent upon the FDIC to explain how this data can be harmonized with the final insurance determination.”

However, the Court found that, because the FDIC “ultimately concluded the deposit account records clearly and unambiguously indicated the Challenged Accounts were owned in the manner of ‘corporate accounts,’ the FDIC’s controlling regulations expressly prohibited it from considering any ‘other records on the manner in which the funds [were] owned.'” The extrinsic evidence analysis sought by Petitioner was therefore not “relevant data” for purposes of the FDIC’s final insurance determination. “The absence of any discussion pertaining to this evidence in the FDIC’s final determination is unsurprising given the regulations, and in no way arbitrary or capricious.”

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