Replace 2/27/25: This case has now been dismissed, apparently as a part of the diminishment of the position of CFPB, per information sources.
Unique Submit 1/14/25:
I discover this lawsuit towards Capital One fascinating: (CFPB article hyperlink)
CFPB is suing Capital One for dishonest shoppers out of $2B in financial savings account curiosity. See, Capital One froze the rate of interest on their ‘360 financial savings’ account at .30% in 2019 and opened a brand new model known as the ‘360 Efficiency Financial savings account’ which continued to extend its charges as rates of interest rose.
We’ve seen many banks make use of this sort of technique. Primarily they wish to lock within the older clients on the decrease fee to pad their income, after which use the brand new account product to lure new clients.
Within the case of Capital One, the technique was notably egregious since they marketed broadly their higher-than-average 360 Efficiency account with a reputation just like the previous 360 account. This led customers of their previous model to imagine they’re incomes the upper fee.
In our record of Finest Excessive Yield Financial savings Accounts we attempt highlighting which banks take the low highway and cut up out accounts to keep away from rising charges for older clients. The higher banks steadily enhance and reduce rates of interest together with market norms.
These affected by this Capital One scandal are doubtless people who find themselves busy or older and by no means stopped to look via their statements and analyze rates of interest. It may be, for instance, somebody who was suggested to open the 360 account with the expectation that it might sustain with rates of interest after which by no means adopted as much as see what charges are being earned.
Past the particular lawsuit towards Capital One, I discover this case intriguing since it may doubtlessly reverberate within the wider banking business as banks concern the CFPB’s wrath when utilizing these varieties methods. Hopefully this may end in banks taking out the account splitting technique, and providing all clients constant rates of interest.