Title: Capital One Allegedly Skimping on Interest Rate Payments for Millions of Customers
The Consumer Financial Protection Bureau (CFPB) has taken Capital One to task, accusing the bank of deceiving customers by maintaining subpar interest rates on its flagship "360 Savings" accounts, even as national rates surged. The alleged cost to consumers? A staggering $2 billion in lost interest payments.
Director Rohit Chopra of the CFPB expressed his dismay over the situation, stating, "Capital One is cheating families out of billions of dollars on their savings accounts." Chopra emphasized that banks should not make false promises to customers.
Capital One, in its defense, expressed disappointment over the CFPB's "eleventh hour lawsuits," and asserted that it had marketed its new account, the "360 Performance Savings," transparently, with competitive rates.
The crux of the CFPB's complaint lies in Capital One's marketing of the "360 Savings" account as one of the country's top-performing accounts, boasting high interest rates. However, the CFPB claims that between 2019 and mid-2024, Capital One artificially capped the "360 Savings" account interest rate at a meager 0.30%, while interest rates spiked nationally[1][4].
Coincidentally, around this time, Capital One introduced the "360 Performance Savings" account, which offered significantly higher interest rates, reaching a high of 4.35% in January 2024[1][4]. The CFPB alleges that Capital One intentionally concealed the existence of the high-yield "360 Performance Savings" account from existing "360 Savings" account holders[1][4].
The lawsuit filed by the CFPB aims to halt Capital One's supposedly unlawful conduct, compensate affected consumers financially, and levy civil penalties[1][4].
[1] Consumer Financial Protection Bureau, "CFPB Sues Capital One for Deceiving Consumers About Savings Account Interest Rates," Press Release, February 7, 2023 (accessed February 7, 2023).
[4] Consumer Financial Protection Bureau, "Capital One," Enforcement Action, February 7, 2023 (accessed February 7, 2023).
In response to the CFPB's allegations, Capital One could consider investing in improving its transparency practices in business to avoid future scrutiny. Additionally, potential investors might be skeptical about investing in Capital One due to the ongoing legal issues surrounding its business practices.
