was capital one filed a lawsuit against Alleged by the Consumer Financial Protection Bureau for misleading consumers about offering high-interest savings accounts. The lawsuit claims that as a result, customers lost more than $2 billion in potential interest payments.
In a complaint filed Tuesday, the Consumer Financial Protection Bureau took aim at Capital One's promises and handling of its “360 Savings” accounts, which were promoted as offering one of the highest interest rates in the country . But instead, the CFPB alleges, Capital One froze its rate at a low level for at least several years, even as rates rose nationally.
At the same time, the CFPB adds, the bank created “360 Performance Savings,” which had much higher rates — at one point, 14 times higher than the original “360 Savings” accounts. The lawsuit comes as savers have benefited from the Federal Reserve's decision to lower interest rates in an effort to fight rising inflation. As a result, some banks have introduced high-interest savings accounts to attract savers.
But at the same time, some banks have not increased the rates on their savings accounts, creating a gap between low-paying and top-paying accounts, similar to Capital One's two offerings. According to the CFPB, Capital One marketed the products similarly to obscure its distinction and prohibited employees from “actively telling” people with 360 Savings accounts about the higher-paying 360 Performance Savings, the agency said. Said.
“Capital One did not specifically inform 360 Savings account holders about the new product, and instead acted to keep them in the dark about these better-paying accounts,” the CFPB said in a statement. The lawsuit comes as savers have benefited from the Federal Reserve's decision to lower interest rates to fight rising inflation, which has allowed banks to launch high-interest savings accounts after years of low rates .
In response, Capital One said it strongly disagrees with the CFPB's allegations and plans to “vigorously defend” itself in court. The banking giant said it was “disappointed to see the CFPB continuing its recent pattern of filing eleventh-hour lawsuits before a change in administration.”
Capital One also said that all of its 360 banking products “offer great rates” – and are “always available within minutes to all new and existing customers without any of the typical industry restrictions.”
Billions in interest lost
The CFPB wrote in its Tuesday complaint that these actions mean Capital One “illegally avoided paying billions in interest to millions of consumers.” The agency says it is seeking to impose civil penalties and provide financial relief to those affected.
“Banks should not trap people with promises they can't keep,” CFPB Director Rohit Chopra said in a prepared statement.
According to disclosures on Capital One's website, 360 savings accounts currently have interest rates as low as 0.50%. The interest rate on 360 Performance savings accounts is approximately 3.74%.
This means that the 360 performance savings rate is approximately 7.5 times higher than the 360 savings today. But the CFPB says they have gone too far in the past. In July 2024, the agency said in Tuesday's complaint, the 360 Performance savings rate was 14 times higher than 360 Savings.
The CFPB alleges that Capital One kept the rate for its 360 savings accounts at 0.30% between December 2020 and at least August 2024. In contrast, the rate for 360 Performance Savings increased from 0.40% to 4.35% in April 2022. That will drop slightly to 4.25% by early 2024 – August, the agency said Tuesday.
The CFPB's complaint against Capital One comes less than a week before the inauguration of President-elect Donald Trump on January 20. Despite the change in administration, some say the trial may still continue.
The CFPB, for example, has yet to take enforcement actions under Trump's first term, though it may also find it easier to settle such litigation under the incoming administration, TD Cowen's analyst note on Tuesday said.