New York Sues Capital One, Pursuing Similar Case CFPB Dropped

New York Attorney General Letitia James sued Capital One Wednesday (May 14), alleging the bank misled its customers about the existence of a savings account that provided higher interest.

The lawsuit’s allegations are similar to those made by the Consumer Financial Protection Bureau (CFPB) in a case the agency later dropped after a change in leadership, the Office of the New York State Attorney General said in a Wednesday press release.

The release added that James seeks to “ensure that Capital One does not escape accountability.”

James’ lawsuit alleges that Capital One marketed its 360 Savings accounts as having “one of the nation’s best savings rates” but then kept the interest rates “artificially low” while rates rose nationwide, according to the release.

In addition, the lawsuit alleges that the bank created a “nearly identical” savings account called 360 Performance Savings that provided interest rates that were as much as 14 times higher, the release said.

The suit alleges that Capital One “intentionally misled” its 360 Savings customers about the existence of the newer product to avoid paying them additional interest, per the release.

“Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice,” James said in the release. “Big banks are not allowed to cheat their customers with false advertising and misleading promises.”

Reached by PYMNTS, a Capital One spokesperson said in an emailed statement that the bank “strongly” disagrees with the attorney general’s claims and will “vigorously defend” itself in court.

“Capital One is proud of its unique and industry-leading 360 suite of banking products, all of which offer great rates and carry no fees and no minimums,” the statement said.

“Our flagship 360 Performance Savings product was marketed widely, including on national television, and has always been available in just minutes to all new and existing customers without any of the usual industry restrictions,” the statement said.

The CFPB filed its lawsuit against Capital One Jan. 14, with Rohit Chopra, who was the agency’s director at the time, saying in a press release: “The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts.”

The agency dropped the lawsuit Feb. 27, about four weeks after Chopra was fired as CFPB director by President Donald Trump.