FDIC Declines to Defend In-House Judges in Litigation With Bank

The Federal Deposit Insurance Corp. will no longer defend its use of in-house judges in litigation with a Kansas bank after the Justice Department determined “multiple layers of removal restrictions” for the judges are unconstitutional, though the banking regulator will press on in its enforcement action against the lender.

CBW Bank sued the FDIC in November 2024, alleging that an administrative proceeding against the Weir, Kan.-based bank over its anti-money laundering controls violated its right to a jury trial under the Seventh Amendment. The FDIC is seeking a roughly $20.4 million civil money penalty in the case, according to court ...