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Lawsuit by New York Attorney General Letitia James
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Capital One allegedly kept depositors in low-rate accounts
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Consumer Financial Protection Bureau dropped similar case
(Adds accusations, CFPB and depositor litigation, case
citation, byline)
By Jonathan Stempel
NEW YORK, May 14 (Reuters) - Capital One was
sued on Wednesday by New York Attorney General Letitia James,
who accused the bank of cheating depositors with its flagship
"high interest" savings accounts out of millions of dollars in
interest.
In a complaint filed in Manhattan federal court, James said
Capital One promised depositors one of the country's highest
interest rates on their 360 Savings accounts, yet froze their
rate at just 0.30% even as interest rates rose nationwide.
She said Capital One also kept those depositors in the dark
in September 2019, when it launched 360 Performance Savings
accounts, which gave new depositors interest rates that peaked
at 4.35% while older depositors remained stuck with low rates.
James said Capital One never told 360 Savings depositors
they could earn more by switching accounts, and even told
employees to say nothing unless customers asked.
"Customers opened and maintained 360 Savings accounts based
on Capital One's promises that they would receive 'one of the
nation's best savings rates,'" the complaint said. "Instead,
Capital One took advantage of its customers and hoped that they
wouldn't notice."
The lawsuit accused McLean, Virginia-based Capital One of
violating New York consumer protection laws. It seeks civil
fines and restitution to customers.
Capital One did not immediately respond to requests for
comment. Its 360 Performance Savings accounts now yield 3.6%.
The U.S. Consumer Financial Protection Bureau filed a
similar lawsuit against Capital One on January 14, but dropped
its case at the end of February after a change in leadership and
U.S. President Donald Trump's return to the White House.
James noted that dismissal and said her lawsuit "seeks to
ensure that Capital One does not escape accountability."
Last month, Capital One settled private nationwide
litigation in the Alexandria, Virginia federal court over the
360 Savings accounts. Terms have not been disclosed.
Capital One expects to complete its $35.3 billion takeover
of Discover Financial Services ( DFS ) on May 18.
The case is New York v. Capital One NA et al, U.S. District
Court, Southern District of New York, No. 25-04037.