NEW YORK (AP) — Imagine trusting your bank with your hard-earned money, only to discover that they’ve been holding back on some serious interest earnings. That’s exactly what a U.S. watchdog is saying about Capital One. The bank is being sued for allegedly misleading customers about its high-interest savings accounts and, as a result, “cheating” people out of more than $2 billion in lost interest.
The Consumer Financial Protection Bureau (CFPB) filed a complaint on Tuesday, taking aim at Capital One’s “360 Savings” accounts. While Capital One promoted these accounts as offering some of the highest interest rates in the country, the CFPB claims the bank kept the rate unusually low for several years, even when rates were climbing elsewhere in the market.
But that’s not all. The CFPB also claims that while the interest rate for 360 Savings was stuck, Capital One introduced a new account, the “360 Performance Savings,” which offered a much better rate. However, the bank allegedly kept this new product a secret from those who already had a 360 Savings account. The CFPB says Capital One even told its employees not to inform customers about the new, better option.
This, according to the CFPB, means Capital One avoided paying billions of dollars in interest to millions of consumers. They’re now asking for penalties and financial compensation for those impacted.
As CFPB Director Rohit Chopra put it, “Banks should not be baiting people with promises they can’t live up to.”
Capital One’s Response
Capital One, however, strongly disagrees with the allegations. The bank is preparing to “vigorously defend” itself in court and said it was “disappointed” by what it calls a pattern of last-minute lawsuits from the CFPB. They also maintain that all their 360 banking products offer “great rates” and have been accessible to customers without any hidden restrictions.
Currently, Capital One’s 360 Savings accounts offer an interest rate of just under 0.50%, while their 360 Performance Savings accounts are paying around 3.74%. That means the Performance Savings account currently offers almost seven and a half times the rate of the regular 360 Savings.
The problem, according to the CFPB, is that these differences were even more drastic in the past. In July 2024, the Performance Savings rate was more than 14 times higher than the 360 Savings rate. In fact, between December 2020 and August 2024, the interest rate on 360 Savings was stuck at 0.30%, while 360 Performance Savings rates soared to as high as 4.35%.
What’s Next?
With the change in administration on the horizon, some are wondering if this case will continue. While the CFPB has taken action in the past during a change of leadership, it remains to be seen how this one will play out.
If you’re a 360 Savings account holder, you might want to pay close attention — there could be some significant changes ahead.
