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 “high interest” financial savings account out of greater than $2 billion in curiosity funds.
In a criticism filed within the Alexandria, Va., federal courtroom, the CFPB stated Capital One promised depositors that their 360 Financial savings account offered one of many nation’s “top,” “best” and “highest” rates of interest, however froze their charge at simply 0.30% whilst deposit charges rose nationwide.
The CFPB additionally stated Capital One saved 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 staff to not proactively inform depositors they may change accounts, or ship depositors to the financial institution’s account conversion unit except they requested whether or not conversions had been allowed.
“Banks should not be baiting people with promises they can’t live up to,” CFPB Director Rohit Chopra stated in an announcement.
The CFPB stated Capital One stopped providing 360 Financial savings to new prospects when it launched 360 Efficiency Financial savings, which now yields 3.8% yearly, in line 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 Reality in Financial 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 stated in an announcement. “We strongly disagree with their claims and will vigorously defend ourselves in court.”
The McLean, Va.-based financial institution added that it marketed the 360 Efficiency Financial savings account broadly together with on nationwide tv, “with the simplest and most transparent terms in the industry,” and that its 360 accounts all supply nice charges.
Capital One is among the largest US banks and credit-card firms, with $353.6 billion of deposits and $486.4 billion of belongings as of Sept. 30, 2024.
A July 2025 trial in personal nationwide litigation over the 360 Financial savings accounts has been scheduled within the Alexandria courtroom.
In a analysis word, TD Cowen analyst Jaret Seiberg stated 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 Courtroom, Japanese District of Virginia, No. 25-00061.
