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Capital One Reportedly Settling Savings Account Suit for $425 Million
COFCapital One(COF) PYMNTS.com·2025-05-18 19:51

Core Viewpoint - Capital One is set to pay 425milliontosettlealawsuitallegingitmisledsavingsaccountdepositorsregardinginterestrates[1][2].Group1:SettlementDetails−Theproposedsettlementincludes425 million to settle a lawsuit alleging it misled savings account depositors regarding interest rates [1][2]. Group 1: Settlement Details - The proposed settlement includes 300 million to compensate 360 Savings depositors for interest they could have earned with 360 Performance Savings accounts [2]. - An additional 125millionwillbepaidtodepositorswhostillhold360Savingsaccounts[2].−Thecompanydidnotadmittoanywrongdoingaspartofthesettlement[3].Group2:LegalContext−ThesettlementfollowsalawsuitfiledbyNewYorkAttorneyGeneralLetitiaJames,whichclaimsCapitalOnemisledcustomersabouthigherinterestsavingsaccounts[3][4].−ThislawsuitcomesafterapreviouscasefromtheConsumerFinancialProtectionBureau(CFPB),whichwasdroppedearlierthisyear[4].−JamescriticizedCapitalOneforadvertisingits360Savingsaccountsashavingcompetitiverateswhilekeepingthemartificiallylow[5].Group3:CompanyResponseandMarketImpact−CapitalOnehasexpressedstrongdisagreementwiththeallegationsandintendstodefenditselfvigorouslyincourt[5].−ThesettlementandongoinglegalissuesarisejustbeforeCapitalOne′splanned125 million will be paid to depositors who still hold 360 Savings accounts [2]. - The company did not admit to any wrongdoing as part of the settlement [3]. Group 2: Legal Context - The settlement follows a lawsuit filed by New York Attorney General Letitia James, which claims Capital One misled customers about higher interest savings accounts [3][4]. - This lawsuit comes after a previous case from the Consumer Financial Protection Bureau (CFPB), which was dropped earlier this year [4]. - James criticized Capital One for advertising its 360 Savings accounts as having competitive rates while keeping them artificially low [5]. Group 3: Company Response and Market Impact - Capital One has expressed strong disagreement with the allegations and intends to defend itself vigorously in court [5]. - The settlement and ongoing legal issues arise just before Capital One's planned 35 billion acquisition of Discover, which is expected to finalize soon [6]. - Concerns have been raised by lawmakers regarding the implications of this acquisition on market competition, particularly regarding terms dictated by Capital One's network [7].