Capital One Faces CFPB Action
Capital One is under scrutiny from the Consumer Financial Protection Bureau . And that is over claims of misleading customers about interest rates on its savings accounts. The issue rises from a class action lawsuit. It says that Capital One failed to inform account holders about the higher yields available with the 360 Performance Savings account compared to the older 360 Savings account. As a result customers may have missed out on significant interest earnings.
Key Details:
- Interest Rate Discrepancy: The 360 Savings account originally offered a 1.00% interest rate. But has since dropped to 0.30%. Meanwhile the 360 Performance Savings account rates have reached 4.35% in 2024.
- Miscommunication Claims: The lawsuit claims Capital One did not clearly notify 360 Savings account holders about the advantages of switching to the higher yielding account,. That was probably done to minimize the bank's interest expenses.
- CFPB Investigation: The CFPB is exploring these allegations. This could result in enforcement actions or litigation. This comes as Capital One is trying to secure regulatory approval for a $35.3 billion acquisition of Discover Financial Services.
Capital One’s Defense:
The allegations maintained that information about the 360 Performance Savings account was always available on its website. Capital One has filed a motion to dismiss the class action lawsuit. They insist that customers had access to details if they chose to look for them . Regulatory scrutiny from the CFPB combined with could impact Capital One’s strategic initiatives and market operations.
