Capital One Discloses CFPB Investigation of Savings Account Products

Core Viewpoint - Capital One is facing potential enforcement action from the Consumer Financial Protection Bureau (CFPB) related to its new savings account product, which offers a higher interest rate than existing products [1][3]. Regulatory Actions - The CFPB issued a Civil Investigative Demand in August 2023 following a class action lawsuit against Capital One regarding its savings account products [2]. - In October 2024, the CFPB sent a Notice of Opportunity to Respond and Advice (Nora) letter, indicating the possibility of enforcement action based on claims similar to those in the ongoing litigation [3]. Legal Proceedings - Capital One is currently responding to the Nora letter, and there is a possibility of litigation following the Nora process [3]. - The initial class action lawsuit has led to six additional similar lawsuits, with a consolidated complaint filed in July 2023 and a trial date set for July 2025 [3][4]. - The company has filed a motion to dismiss the consolidated complaint, which is pending in court [4]. Customer Communication Issues - Reports indicate that when Capital One introduced its new 360 Performance Savings account, it failed to clearly communicate the differences between this account and the existing 360 Savings account, leading to customer confusion and missed earnings [4]. - Customers have alleged that their savings accounts were earning only 0.3% instead of the advertised 4.35% [5]. Other Investigations - Separately, the New York Attorney General is investigating Capital One's proposed acquisition of Discover Financial Services [6].