Capital One customers lose potential reimbursements of up to $2 billion; consumers stand to lose even more if other cases are dropped
ALEXANDRIA, VA – Attorneys representing the Consumer Financial Protection Bureau today dropped its lawsuit against Capital One, forfeiting potential reimbursements of up to $2 billion for customers of the bank with “360 Savings” accounts. The lawsuit is just one of dozens of CFPB enforcement cases against financial companies pending nationwide that may no longer be pursued under the bureau’s new leadership, which has halted most activities.
“One of the CFPB’s strongest tools is its ability to enforce existing consumer protection statutes and order companies to refund customers and pay a hefty civil penalty when they are found in court to have broken the law,” said Chuck Bell, advocacy program director at Consumer Reports. “Dismissing its lawsuit against Capital One sends the message that the CFPB plans to look the other way when banks and other financial companies mistreat their customers. Consumers who have been treated unfairly by banks, paycheck advance companies, and other lenders stand to lose billions of dollars in potential relief if the CFPB abandons its pending cases.”
The CFPB’s lawsuit against Capital One alleged that it misled customers by promising that its 360 Savings account had one of the nation’s highest interest rates, but the bank capped the rate while interest rates for savings accounts rose across the country. The CFPB’s lawsuit charged that the bank failed to make those customers aware of a “virtually identical” savings account it created that paid substantially higher interest – as much as 14 times more than the 360 Savings account at one point.
In addition to the CFPB’s enforcement lawsuits, there are a handful of other cases in federal appeals courts related to consumer protection rules issued last year by the CFPB, which the Trump administration has already indicated it will stop litigating. Those rules include limits on credit card late fees and bank overdraft charges that together would save consumers an estimated $15 billion annually.
Media Contact: Michael McCauley, michael.mccauley@consumer.org