The Consumer Financial Protection Bureau on Thursday dropped a lawsuit against Capital One Financial that alleged the bank cheated long-standing customers out of more than $2 billion in interest by refusing to honor high interest rates that were offered to new customers.
The CFPB voluntarily dismissed the Capital One lawsuit in
The CFPB also dropped lawsuits on Thursday against the Pennsylvania Higher Education Assistance Agency, Rocket Homes and Vanderbilt Mortgage and Finance.
The dismissals of the suits were not unexpected considering the Trump administration's vocal pro-business agenda.
A Capital One spokesperson said: "We welcome the CFPB's decision to dismiss this action, which we strongly disputed."
The CFPB had sued Capital One in the final days of the Biden administration for misleading consumers about its 360 Savings accounts and obscuring higher-interest savings products from them. The bureau alleged that the bank was "cheating families" by paying savers an interest rate of 0.3% — even as it paid 4.35% to other customers that had opened newer savings accounts. It did so despite telling customers years earlier that they would earn some of the "highest" rates available on savings accounts.
Chopra said last month that Capital One's actions cost consumers $2 billion in lost interest payments and accused the bank of baiting consumers into a lower-paying product while failing to notify them that another product paid substantially more interest.
A group of Capital One customers who were paid lower rates
The CFPB alleged that Capital One failed to notify 360 Savings account holders about a higher-paying product, and instead sought to keep them in the dark about better-paying products.
The CFPB lawsuit alleged that Capital One marketed the 360 Savings account as a "high interest" account with a variable interest rate that was "one of the nation's" "top," "best," and "highest," and would earn much more interest than a traditional average savings account. It also assured former ING Direct savings account holders that with the 360 Savings products, they would "still have great rates."
But from late 2019 to mid-2024, Capital One lowered and then froze the rates on the 360 Savings account to just 0.30%, even as rates increased nationwide. However, starting in 2022, Capital One increased rates on its 360 Performance Savings account rate from 0.40% to 3.3% in 2023 and 4.35% in 2024.
The CFPB claimed that Capital One named and marketed the two products similarly and eliminated nearly all references to the 360 Savings account product on its website and replaced them with references to the essentially identical 360 Performance Savings account, while excluding 360 Savings account holders from a campaign marketing the 360 Performance Savings to other existing customers. The agency claims Capital One also forbade employees from proactively telling 360 Savings account holders about the 360 Performance Savings account.
