By Jonathan Stempel
(Reuters) -Capital One was sued on Tuesday by the U.S. Consumer Financial Protection Bureau, which accused the bank of illegally avoiding the payment of more than $2 billion in interest to consumers who held its flagship “high interest” savings account.
In a complaint filed in the Alexandria, Virginia federal court, the CFPB said Capital One promised customers that their 360 Savings account provided one of the nation’s “top,” “best” and “highest” interest rates, but then froze their rate at just 0.30% even as deposit rates rose nationwide.
The CFPB also said Capital One in 2019 created the 360 Performance Savings account, which was identical to 360 Savings but carried a substantially higher interest rate that reached 4.25% by August 2024, only to obscure its existence to keep 360 Savings account holders from switching.
“Banks should not be baiting people with promises they can’t live up to,” CFPB Director Rohit Chopra said in a statement.
The lawsuit seeks civil fines, restitution and other remedies for violations of the Consumer Financial Protection Act of 2010 and Truth in Savings Act.
“We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration,” Capital One said in a statement. “We strongly disagree with their claims and will vigorously defend ourselves in court.”
The McLean, Virginia-based bank added that it marketed the 360 Performance Savings account widely including on national television, “with the simplest and most transparent terms in the industry,” and that its 360 accounts all offer great rates.
Capital One is among the largest U.S. banks, and had $353.6 billion of deposits as of Sept. 30, 2024.
The case is CFPB v Capital One Financial Corp et al, U.S. District Court, Eastern District of Virginia, No. 25-00061.
(Reporting by Jonathan Stempel in New York; Additional reporting by Michelle Price in Washington, D.C.; Editing by Louise Heavens and Chizu Nomiyama)
Comments