Interest-ing Case

Posted on Jul 22, 2025 by

Shortly before Christmas I stopped into our credit union to cash a check (and get a free bag of hot popcorn!). While there, a personal banker informed me that I should change our money market account into a platinum account so we would get significantly more interest. I greatly appreciated the advice, and he helped me switch the account over.

Presumably, customers of Capital One were equally excited when they signed up for the bank’s “360 Savings” account, which were promoted as accounts having one of the highest interest rates in the nation. Unfortunately, customers didn’t actually receive that interest.

In January, the Consumer Financial Protection Bureau sued Capital One for allegedly misleading consumers about its “360 Savings” accounts. The CFPB, a federal agency dedicated to ensuring customers are treated fairly by banks, lenders and other financial institutions, claimed Capital One’s actions cost customers more than $2 billion in potential interest payments.

According to the complaint, while Capital One promoted the high-interest “360 Savings” accounts, the bank introduced “360 Performance Savings” accounts, which offered a much higher interest rate. Banks across the country advertised high-interest accounts as the Federal Reserve increased rates as part of its effort to fight soaring inflation. Interest rates for “360 Savings” accounts were frozen at a low level for at least several years, however.

This resulted in a large gap between Capital One’s low-and top-paying savings accounts. According to the CFPB, Capital One marketed the products similarly to obscure their distinction. Unlike my helpful credit union employee, Capital One actually forbade employees “from proactively telling” those with “360 Savings” accounts about the higher-paying 360 Performance Savings.

According to Capital One’s website, “360 Savings” accounts currently carry an interest rate of just under 0.50%, while “360 Performance Savings” accounts have an interest rate of about 3.74%. While the “360 Performance Savings” rate is nearly 7.5 times higher than the “360 Savings” rate, the CFPB alleges the gap has been even wider in the past. In July of 2024, the “360 Performance Savings” rate was more than 14 times that of “360 Savings.”

The suit asserted that the rate for “360 Savings” accounts was set at 0.30% from December of 2020 through at least August of 2024. The rate for 360 Performance Savings, though, increased from 0.40% in April of 2022 to as high as 4.35% at the start of 2024. The CFPB sought to impose civil penalties and provide financial relief to customers who opened a “360 Savings” account.

“Capital One did not specifically notify 360 Savings account holders about the new product, and instead worked to keep them in the dark about these better-paying accounts,” the CFPB said in a statement. According to the lawsuit, the bank “illegally avoided paying billions in interest to millions of consumers.” CFPB Director Rohit Chopra declared, “Banks should not be baiting people with promises they can’t live up to.”

Not surprisingly, Capital One strongly disagreed with the CFPB’s allegations and planned to “vigorously defend” itself in court. The bank added that it was “deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration.”

After the election, CFPB was an early target of DOGE. In February, the lawsuit against Capital One was dropped.

Downsizing the CFPB is a Catch-22 – while making government smaller is arguably good, the reduction likely decreases the oversight and protections for consumers that the agency offered.

All I know is that now when I hear Capital One’s “What’s in your wallet?” ads, I’ll certainly think about the bank differently.



The following two tabs change content below.
mm
My LinkedIn profile

Reg P. Wydeven

Elder Law and Estate Planning Attorney at McCarty Law LLP
Hoping to follow in his father’s footsteps from a young age, Reg’s practice primarily consists of advising individuals on estate planning, estate settlement and elder law matters. As Reg represents clients in matters like guardianship proceedings and long-term care admissions, he feels grateful to be able to offer families thorough legal help in their time of need.
mm
My LinkedIn profile

Latest posts by Reg P. Wydeven (see all)