Capital One sued for misleading savings accounts, alleges $2 billion loss

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, accusing the bank of misleading consumers about its high-interest savings accounts and depriving them of over $2 billion in potential interest earnings.

The complaint, filed Tuesday, alleges that Capital One froze the interest rate for its "360 Savings" accounts at a low level for several years, even as national rates increased.

The CFPB claims that while the bank promoted 360 Savings as offering one of the nation’s highest interest rates, it simultaneously introduced a separate "360 Performance Savings" account with significantly higher rates.

According to the complaint, Capital One did not adequately inform 360 Savings account holders about the newer product and allegedly discouraged employees from proactively discussing it with customers.

These practices, the CFPB argues, allowed Capital One to avoid paying billions in interest to millions of customers.

The agency is seeking financial relief for affected consumers and civil penalties against the bank. CFPB Director Rohit Chopra stated, "Banks should not be baiting people with promises they can’t live up to."

Capital One has denied the allegations, stating that it "strongly disagrees" with the CFPB's claims and intends to "vigorously defend" itself in court.

The bank also criticized the timing of the lawsuit, describing it as part of the CFPB’s “recent pattern of filing eleventh-hour lawsuits ahead of a change in administration.”

Capital One maintains that all of its 360 banking products have consistently offered competitive rates and are accessible to both new and existing customers.

As of now, 360 Savings accounts have an interest rate of just under 0.50%, while 360 Performance Savings accounts offer a rate of approximately 3.74%. The CFPB noted in its complaint that the disparity between the two accounts has been significantly wider in the past.

For example, the rate for 360 Savings accounts reportedly remained at 0.30% from December 2020 through at least August 2024.

By contrast, the rate for 360 Performance Savings accounts increased from 0.40% in April 2022 to 4.35% at the start of 2024, before falling slightly to 4.25% by August.

The lawsuit was filed just days before the Jan. 20 inauguration of President-elect Donald Trump. Analysts suggest that while the new administration may influence enforcement actions, litigation initiated under the CFPB’s current leadership could continue.