Capital One Faces CFPB Lawsuit Over Alleged Savings Account Scheme

The Consumer Financial Protection Bureau (CFPB) has taken legal action against Capital One, N.A., and its parent company, Capital One Financial Corp. The lawsuit accuses the banking giant of misleading millions of customers about interest rates on its flagship “360 Savings” account—an alleged misrepresentation that may have cost savers more than $2 billion in unpaid interest.

The CFPB’s case hinges on claims that Capital One froze interest rates on the 360 Savings account at 0.30% from 2019 to mid-2024, even as rates soared nationwide. Compounding the issue, the bank allegedly launched a higher-yielding, nearly identical product, the “360 Performance Savings” account, but concealed its availability from existing 360 Savings accountholders.

At the center of the CFPB’s allegations is a breach of transparency—one of the cornerstones of effective compliance. According to the lawsuit, Capital One misrepresented the 360 Savings account as offering “top,” “best,” and “highest” interest rates. Yet, the CFPB contends that these promises were undermined by the bank’s decision to maintain an artificially low rate, depriving savers of billions in potential earnings.

Equally troubling is the bank’s alleged two-tier system. While marketing the 360 Performance Savings account to new customers with rates as high as 4.35%, Capital One purportedly excluded 360 Savings accountholders from marketing campaigns, erased references to their account online, and instructed employees to withhold information about the better-paying product. These practices raise critical questions about whether Capital One’s actions were designed to obfuscate rather than inform—a potential violation of both the Truth in Savings Act and broader consumer protection laws.

Navigating the Compliance Minefield

The CFPB’s action against Capital One serves as a case study in the risks of insufficient transparency and customer segmentation strategies that prioritize profits over fairness. Compliance professionals can draw several key lessons from this enforcement action:

1. Truth in Marketing: Representations about financial products must align with actual terms and benefits. Misleading marketing, even by omission, can lead to allegations of deception.
2. Customer Communication: Institutions must ensure clear, proactive communication when introducing new or alternative products. Failure to inform existing customers of beneficial options can be seen as deliberate concealment.
3. Internal Controls: Policies that discourage employees from sharing relevant product information may violate consumer protection standards. Training programs should reinforce transparency as a compliance priority.

Regulatory Consequences on the Horizon

CFPB Director Rohit Chopra has been vocal in criticizing practices that exploit consumer trust, stating, “Banks should not be baiting people with promises they can’t live up to.” If successful, the CFPB’s lawsuit could result in significant redress for affected customers, civil penalties paid into the CFPB’s victims relief fund, and a directive for Capital One to reform its practices.

With $480 billion in assets, Capital One is a major player in the U.S. financial sector, making this lawsuit a high-profile reminder that size does not exempt institutions from regulatory scrutiny. Compliance teams across the industry should take note: customer-centric practices are not just good business—they’re a regulatory imperative.

As regulators ramp up enforcement, financial institutions must assess whether their product marketing, disclosures, and customer communications truly reflect the principles of fairness and transparency.

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