Capital One accused of owing members $2 billion, US watchdog claims: NPR

A sign above an ATM at a Capital One Café on February 19, 2024 in Miami.

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The Consumer Finance Protection Bureau is suing Capital One, alleging the bank failed to pay more than $2 billion in interest to its customers.

The Consumer Bureau, a federal agency responsible for consumer protection in the financial sector, claims Capital One marketed its 360 Savings Account as having some of the best interest rates in the country, but failed to mention to those customers that its newer product, the 360 ​​Performance Savings Account, had interest rates up to 4.35% compared to the 0 .30%. rate of 360 savings.

The agency alleges the bank “planned” for members to keep their lower-yielding 360 savings accounts open by freezing their interest rates, giving the lower- and higher-yielding accounts similar names, and not marketing the higher-yielding accounts to them.

“The CFPB is suing Capital One for defrauding families out of billions of dollars in their savings accounts,” CFPB Director Rohit Chopra said. “Banks shouldn’t lure people in with promises they can’t deliver.”

Capital One did not immediately respond to an inquiry from NPR, but in a declaration given to the Associated Press, it said it is “deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration.” The bank added that its 360 products “have always been available in minutes to all new and existing customers without any of the usual industry restrictions,” AP reported.

The CFPB said with its lawsuit that it intends to stop Capital One’s allegedly illegal practices and have it award civil penalties to a CFPB victim assistance fund.