The government's consumer watchdog group sued Capital One on Tuesday, accusing it of “defrauding” customers of billions of dollars in interest.
Consumer Financial Protection Bureau (CFPB) Accusing big banks Despite promising the “highest'' and “highest'' interest rates in the country, interest rates on 360 savings accounts will be frozen at a low level due to rising interest rates.
In 2019, Capital One created a separate 360 Performance Savings account that pays much more interest than 360 Savings. However, the CFPB alleged that Capital One hid new products to prevent customers from switching, costing consumers more than $2 billion in interest payments.
“The CFPB is suing Capital One for defrauding families of billions of dollars in their savings accounts,” said CFPB Director Rohit Chopra, a candidate for President Biden.
“Banks should not deceive people with promises they cannot keep.”
Capital One said in a statement that the 360 Performance Savings Account was “widely marketed, including on national television.”
“We are very disappointed to see the CFPB continue its recent pattern of filing lawsuits at the 11th hour ahead of a change of administration. We strongly disagree with their claims and , we intend to vigorously defend ourselves in court,” Capital One said in a statement.
Chopra is expected to be fired as CFPB director by President-elect Trump on Inauguration Day.
The CFPB alleged that Capital One kept the Savings 360 interest rate fixed at 0.3% from December 2020 to August 2024. After interest rates were near zero during the pandemic, the Federal Reserve raised interest rates to the highest level in 22 years, ranging from 5.25% to 5.5% from March 2022 to July 2023.
According to the CFPB, the 360 performance savings rate in August was more than 14 times higher than the 360 savings rate.
Capital One said it is “proud” of its 360 product offering and the rates it offers with no fees or minimums, and that accounts can be activated in just minutes.
