TSX runs higher on rate cut expectations
Investing.com -- The U.S. Consumer Financial Protection Bureau (CFPB) has decided to drop legal action against Capital One (NYSE:COF). The financial institution was accused of deceiving consumers and causing them to lose more than $2 billion in interest payments related to savings accounts.
The decision to dismiss the case was made on Thursday, and it is in line with President Donald Trump’s swift actions to dismantle the CFPB. The President has previously stated that the agency should be abolished. The dismissal of the case against Capital One coincided with the Senate confirmation hearing of Jonathan McKernan, Trump’s nominee to head the CFPB.
The CFPB initially filed the lawsuit against Capital One in 2024. The agency accused the bank of cheating millions of consumers out of more than $2 billion in interest. According to the CFPB, Capital One had promised its customers that its flagship "360 Savings" account offered one of the nation’s "best" and "highest" interest rates. However, the bank allegedly kept the interest rate at a low level while interest rates were increasing nationwide.
Around the same period, Capital One introduced a nearly identical product, the "360 Performance Savings," which was similar to the 360 Savings account but offered significantly higher interest. At one point, the interest payout of the 360 Performance Savings was more than 14 times the rate of the 360 Savings account. The CFPB alleges that Capital One did not inform the 360 Savings account holders about the new product and instead, made efforts to keep them unaware of these higher-paying accounts.
The CFPB claimed that Capital One’s actions obscured the new product from its 360 Savings account holders, costing millions of consumers more than $2 billion in lost interest payments. The lawsuit aimed to halt the bank’s alleged illegal conduct, provide compensation for the affected consumers, and impose civil money penalties, which would have been paid into the CFPB’s victims relief fund.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.