Attorney General James Applauds New Capital One Settlement

NEW YORK – New York Attorney General Letitia James today commended a new settlement that will require Capital One to provide $425 million in restitution and better interest rates for its 360 Savings customers who were cheated out of higher interest payments on their savings accounts for years. After Attorney General James led a bipartisan coalition of attorneys general in opposing an earlier proposed a class action settlement that did not deliver enough for Capital One customers who were wronged, this new settlement more than doubles the value of the earlier one. Attorney General James sued Capital One in May for misleading its 360 Savings customers to avoid paying them higher interest rates.

“Capital One customers were counting on growing their savings accounts, but their bank misled them and cheated them out of valuable interest payments for years,” said Attorney General James. “Today we are delivering justice for those customers nationwide and ensuring that they will receive the higher interest rates they were originally promised. I look forward to seeing this settlement approved and will always fight to ensure New Yorkers are treated fairly by their banks.”

Capital One marketed its 360 Savings accounts as “high interest” accounts with “one of the nation’s best savings rates” that would earn its customers more than an average savings account. However, while interest rates rose nationwide beginning in 2022, Capital One kept the interest rates for its 360 Savings accounts artificially low. Instead, Capital One created “360 Performance Savings,” a nearly identical type of savings account that provided much higher interest rates than 360 Savings – at one point, more than 14 times higher. In May, Attorney General James sued Capital One for misleading its 360 Savings account customers about the interest rates they would receive, allowing the bank to avoid paying the high interest rates that it promised.

In September, Attorney General James led a bipartisan coalition of attorneys general in filing an amicus brief opposing a proposed class action settlement that would have shortchanged 360 Savings customers. The proposed settlement would have delivered less than $300 million in restitution payments while allowing Capital One to continue to underpay 360 Savings customers’ interest. After Attorney General James and the coalition raised objections to this settlement, the court rejected it.

Capital One has now agreed to a new settlement that would deliver substantially more for 360 Savings customers. The settlement, which was preliminarily approved by the court today, will require Capital One to pay $425 million in restitution, including an estimated $34 million to New Yorkers who had 360 Savings accounts. The settlement will also require Capital One to match 360 Savings and 360 Performance Savings interest rates, erasing the misleading two-tiered system of accounts at the heart of Attorney General James’ lawsuit and providing an estimated $530 million to consumers nationwide in future additional interest. The Office of the Attorney General (OAG) will voluntarily dismiss its lawsuit if the revised class action settlement receives final approval from the court and goes into effect.

This matter is being handled by Assistant Attorneys General Adam J. Riff, Chisolm Allenlundy, and Nora Van Horn, and former Assistant Attorney General Jason E. Meade, with the Consumer Frauds and Protection Bureau. The Consumer Frauds and Protection Bureau is led by Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine, and is a part of the Division of Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.