Capital One sued the US regulator for defrauding its clients of $2 billion

NEW YORK (AP) — U.S. regulators are suing Capital One for misleading consumers about its offerings for high-interest savings accounts and costing customers more than $2 billion in lost 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. Despite promoting 360 Savings as an account offering one of the nation’s highest interest rates, CFBB Capital One has kept its rates low for at least a few years, even as they continue to rise nationwide.

At the same time, CFBB added, the bank created “360 Performance Savings,” which the agency said was growing significantly, but the agency said it did not notify Capital One 360 ​​savings account holders of this new offering and “instead worked to retain them.” In the dark” – the company marketed its products similarly to hide the differences and prevented employees from “talking about” the 360 ​​savings, accounting for nearly 360 performance savings.

These actions caused Capital One to “unlawfully avoid paying billions in interest to consumers,” CFBB wrote in Tuesday’s complaint. The agency said it is seeking to impose civil penalties and provide financial relief to those affected.

“Banks shouldn’t lure people with promises they can’t keep,” CFPB director Rohit Chopra said in a prepared statement.

In response, Capital One said it strongly disagrees with the CFPB’s allegations and plans to “vigorously defend” itself in court. The bank account giant added, “It is disappointing to see the CFPB continue its recent eleventh-hour filing of lawsuits prior to the change in administration.”

Capital One says all of its 360 banking products “offer great value” – and are always “available within minutes to all new and existing customers outside of normal industry restrictions”.

According to statements on Capital One’s website, 360 savings accounts currently have an interest rate of less than 0.50 percent. 360 Performance Savings Accounts have an interest rate of about 3.74%.

This means that the amount of 360’s performance savings could be 7.5 times greater than 360’s savings today. But CFBB says they were already too far apart. In a July 2024 complaint filed Tuesday, the agency noted that 360’s performance savings rate was more than 14 times 360’s savings.

CFPB sets Capital One at 0.30% for 360 savings accounts between December 2020 and August 2024. 360’s performance savings rate, on the other hand, rose from 0.40% to 4.35% in April 2022. Early 2024 – It fell slightly to 4.25% in August, the agency said. Tuesday.

The CFPB’s complaint against Capital One comes less than a week ago January 20 graduation President-elect Donald Trump. Despite the change in management, some say the dispute may continue. A TD Cowen analyst opinion on Tuesday noted that the CFPB would still have brought enforcement actions during Trump’s first term, for example, although such litigation may be easier to resolve under the incoming administration.