Capital One, a major U.S. bank, is facing a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) for allegedly misleading customers about interest rates on its 360 Savings account, potentially costing depositors over $2 billion.
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The CFPB alleges that Capital One marketed its 360 Savings account as having one of the highest interest rates available, while simultaneously freezing the rate at a mere 0.30% even as national deposit rates climbed. This practice, the CFPB contends, contradicts Capital One’s advertising claims of offering “top,” “best,” and “highest” rates, effectively shortchanging customers on earned interest.
Further complicating the matter, the CFPB claims that Capital One introduced a nearly identical product in 2019, the 360 Performance Savings account, which offered significantly higher interest rates, reaching as high as 4.35% in January 2024. The lawsuit alleges Capital One actively discouraged existing 360 Savings customers from switching to the higher-yielding account, instructing employees not to proactively inform customers of the option. Customers were reportedly only directed to the account conversion unit if they specifically inquired about switching.
CFPB Accuses Capital One of “Bait-and-Switch” Tactics
CFPB Director Rohit Chopra criticized Capital One’s actions, stating that “Banks should not be baiting people with promises they can’t live up to.” The lawsuit seeks restitution for affected customers, civil penalties, and other remedies under the Consumer Financial Protection Act of 2010 and the Truth in Savings Act.
Capital One has responded by expressing strong disagreement with the CFPB’s claims, characterizing the lawsuit as an “eleventh-hour” filing before a change in administration. The bank maintains that it marketed the 360 Performance Savings account transparently, including through national television advertising, and emphasizes that all its 360 accounts offer competitive rates. The bank intends to vigorously defend itself in court.
Impact on Capital One and the Discover Acquisition
Capital One ceased offering the 360 Savings account to new customers upon the introduction of the 360 Performance Savings account, which currently yields 3.8% annually. As one of the largest U.S. banks and credit card companies, with substantial deposits and assets, Capital One’s financial standing remains significant.
Industry analysts, such as Jaret Seiberg of TD Cowen, suggest that the CFPB lawsuit is unlikely to derail Capital One’s pending $35.3 billion acquisition of Discover Financial Services. A separate private litigation concerning the 360 Savings accounts is scheduled for trial in July 2025 in the same Virginia court.
This case underscores the importance of transparency and accurate representation in financial product marketing. The outcome of the lawsuit will likely have significant implications for Capital One and could influence industry practices regarding savings account interest rates and disclosure. The case is CFPB v. Capital One Financial Corp et al, U.S. District Court, Eastern District of Virginia, No. 25-00061.
