Capital One Discloses CFPB Investigation of Savings Account Products
Capital One disclosed Thursday (Oct. 31) that it could face an enforcement action by the Consumer Financial Protection Bureau (CFPB) regarding its introduction of a new savings account product with a higher interest rate than its existing savings account products.
The regulator sent the bank a Civil Investigative Demand in August after Capital One was sued in a class action lawsuit relating to those savings account products in July 2023, the bank said in a filing with the Securities and Exchange Commission (SEC).
“In October 2024, the CFPB issued a Notice of Opportunity to Respond and Advice (‘Nora’) letter indicating that the CFPB is considering an enforcement action against us on similar grounds as the claims in the Savings Account Litigation,” Capital One said in the filing. “We are responding to the NORA letter and it is possible the CFPB will pursue an enforcement action, including possible litigation, at the end of the NORA process.”
The bank also said in the filing that the initial class action lawsuit was followed by six similar class actions and that the plaintiffs filed a consolidated complaint in July. The court set a trial date in July 2025.
“We filed a motion to dismiss the consolidated complaint, which is fully briefed and pending with the court,” Capital One said in the filing.
This disclosure was flagged Friday by Reuters, which reported that when the bank introduced its new 360 Performance Savings account — which had a higher interest rate that the one paid to customers with its 360 Savings account — it did not clearly communicate the difference between the two products, resulting in them missing out on potential earnings.
Capital One said that it had a contractual right to change interest rates and that the information about the new account was available to customers on its website, according to the report.
It was reported in February that customers alleged that their Capital One savings accounts were earning 0.3% rather than the 4.35% the bank was advertising.
In another, separate investigation, it was reported Oct. 23 that New York Attorney General Letitia James is investigating Capital One’s proposed acquisition of Discover Financial Services.
The post Capital One Discloses CFPB Investigation of Savings Account Products appeared first on PYMNTS.com.