Core Points - Capital One is settling a class action lawsuit for allegedly freezing savings account rates, preventing customers from earning billions in interest payments [1][4] - The settlement amount is $425 million, with a deadline for customers to claim their share by October 2 [1][4] - The settlement is pending court approval, with a hearing scheduled for November 6 [1] Lawsuit Background - The class action lawsuit was filed in 2024 in U.S. federal court in Alexandria, Virginia, by customers against Capital One [4] - The Consumer Financial Protection Bureau (CFPB) also sued Capital One earlier in the year, claiming the bank froze its rates despite rising national rates, resulting in over $2 billion in lost interest payments for customers [4][5] - The CFPB described Capital One's marketing of its 360 Savings account as misleading, claiming it offered "one of the nation's best" variable rates [5] Additional Legal Actions - New York Attorney General Letitia James filed a lawsuit against Capital One in May for misleading customers about interest rates [6] - On September 24, James led a coalition of 17 attorneys general opposing the proposed $425 million settlement, arguing it would shortchange customers and benefit Capital One [6]

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].

Core Viewpoint - Capital One Financial Corporation is under investigation for possible securities fraud, with a class action lawsuit potentially being filed on behalf of affected investors [1][3]. Group 1: Legal Actions and Investigations - The Portnoy Law Firm has initiated an investigation into Capital One regarding allegations of securities fraud and is encouraging investors who have incurred losses to reach out for legal assistance [1][2]. - Capital One has faced litigation for allegedly failing to transition its 360 Savings accountholders to a new offering and for concealing the existence of the 360 Performance plan, leading to a $425 million settlement in a multi-district litigation class action [3]. - The company is also facing a separate lawsuit from New York Attorney General Letitia James in the U.S. District Court for the Southern District of New York [3]. Group 2: Company Responsibilities - The investigation by the Portnoy Law Firm is focusing on whether Capital One's officers and/or directors breached their fiduciary duties to shareholders or violated state or federal laws [4]. - The Portnoy Law Firm has a history of representing investors in claims against corporate wrongdoing, having recovered over $5.5 billion for aggrieved investors [5].