Core Insights - A bipartisan group of 18 U.S. states is opposing Capital One's (COF) proposed $425 million settlement with depositors, who allege deceptive practices regarding interest rates during a rising rate cycle [1][10]. Settlement Details - In May 2025, Capital One agreed to a settlement of $300 million to compensate depositors for missed interest, along with an additional $125 million for existing account holders, while denying any wrongdoing [2]. - The lawsuit, initiated in 2023, claims that Capital One misled customers by creating a new high-yield account instead of increasing rates on its existing 360 Savings account [3]. Interest Rate Discrepancies - As of September 16, 2019, 360 Savings account holders received an interest rate of 1%, while the newly introduced 360 Performance Savings account offered 1.90% [4]. - The lawsuit alleges that Capital One's actions caused significant losses in interest for 360 Savings account holders, particularly as rates began to rise in March 2022, with the disparity reaching 4.30% for Performance Savings accounts compared to just 0.30% for Savings accounts [5]. Opposition Rationale - The opposition, led by New York Attorney General Letitia James, argues that the settlement would allow Capital One to continue its deceptive practices, with states claiming that depositors would only recover a fraction of their losses [6][7]. - The states contend that 360 Savings depositors would earn only 0.78%, significantly lower than the 3.5% offered to Performance Savings depositors, potentially allowing Capital One to save over $2.5 billion without changing its practices [7]. Upcoming Legal Proceedings - A hearing is scheduled for November 6 to consider the final approval of the settlement, amidst rising legal challenges for Capital One [10]. Company Performance - Over the past six months, Capital One's shares have increased by 24.8%, while the industry has seen a growth of 48.3% [9].