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 paying more than $2 billion in interest to consumers who held its “high-interest” checking account.
In a lawsuit filed in federal court in Alexandria, Virginia, the CFPB said Capital one promised customers their 360 savings account offered one of the “best”, “best” and “highest” interest rates in the country, but then froze their rate at just 0.30% even as deposit rates rose across the country.
The CFPB also said Capital One created a 360 Performance Savings account in 2019, which was identical to 360 Savings but carried a significantly higher interest rate that reached 4.25% through August 2024, only to obscure its existence in order to prevented 360 Savings account holders from switching.
“You shouldn’t be luring people in with promises you can’t keep,” CFPB Director Rohit Chopra said in a statement.
The suit seeks civil fines, restitution and other remedies for violations of the Consumer Financial Protection Act of 2010 and the Truth in Savings Act.
“We are deeply disappointed to see the CFPB continue its recent pattern of filing complaints within the eleventh hour before 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 has advertised the 360 Performance Savings account widely, including on national television, “with the simplest and most transparent terms in the industry,” and that all of its 360 accounts offer excellent rates.
Capital One is among the largest American banks, and by September 30, 2024, it had $353.6 billion in deposits.
The case is CFPB v. Capital One Financial Corp (NYSE:) et al, U.S. District Court, Eastern District of Virginia, No. 25-00061.
