Capital One was sued on Tuesday by the US Client Monetary Safety Bureau, which accused the financial institution of illegally dishonest prospects who held its flagship “excessive curiosity” financial savings account out of greater than $2 billion in curiosity funds.
In a grievance filed within the Alexandria, Va., federal court docket, the CFPB mentioned Capital One promised depositors that their 360 Financial savings account offered one of many nation’s “prime,” “finest” and “highest” rates of interest, however froze their charge at simply 0.30% whilst deposit charges rose nationwide.
The CFPB additionally mentioned Capital One stored 360 Financial savings depositors in the dead of night when in 2019 it launched the 360 Efficiency Financial savings account, which was an identical apart from carrying a considerably increased rate of interest that reached 4.35% in January 2024.
Capital One allegedly informed department workers to not proactively inform depositors they might swap accounts, or ship depositors to the financial institution’s account conversion unit until they requested whether or not conversions had been allowed.
“Banks shouldn’t be baiting folks with guarantees they will’t dwell as much as,” CFPB Director Rohit Chopra mentioned in a press release.
The CFPB mentioned Capital One stopped providing 360 Financial savings to new prospects when it launched 360 Efficiency Financial savings, which now yields 3.8% yearly, in keeping with the financial institution’s web site.
Tuesday’s lawsuit seeks civil fines, restitution and different treatments for violations of the Client Monetary Safety Act of 2010 and Fact in Financial savings Act.
“We’re deeply upset to see the CFPB proceed its latest sample of submitting eleventh-hour lawsuits forward of a change in administration,” Capital One mentioned in a press release. “We strongly disagree with their claims and can vigorously defend ourselves in court docket.”
The McLean, Va.-based financial institution added that it marketed the 360 Efficiency Financial savings account broadly together with on nationwide tv, “with the best and most clear phrases within the trade,” and that its 360 accounts all supply nice charges.
Capital One is without doubt one of the largest US banks and credit-card firms, with $353.6 billion of deposits and $486.4 billion of property as of Sept. 30, 2024.
A July 2025 trial in non-public nationwide litigation over the 360 Financial savings accounts has been scheduled within the Alexandria court docket.
In a analysis be aware, TD Cowen analyst Jaret Seiberg mentioned the CFPB lawsuit mustn’t have an effect on Capital One’s proposed $35.3-billion buy of credit-card rival Uncover Monetary Companies.
The case is CFPB v. Capital One Monetary Corp et al, U.S. District Court docket, Jap District of Virginia, No. 25-00061.