Attorney General Bonta Helps Secure $425 Million Capital One Settlement

Settlement doubled in value after AG Bonta demanded a better deal for consumers

OAKLAND — California Attorney General Rob Bonta today commended the preliminary approval of a new class action settlement and related resolution of claims by the attorneys general that, if approved by the court, 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. Last year, Attorney General Bonta joined a bipartisan coalition of attorneys general in opposing an earlier proposed 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. The resolution, preliminarily approved this week, includes an order resolving related claims by California, Maryland, Massachusetts, Minnesota, Nevada, New York, Ohio, and Rhode Island, giving those states the authority to enforce payment of consumer relief, and stopping Capital One from making false or deceptive statements or otherwise violating state consumer protection laws pertaining to interest rates provided by the bank’s deposit accounts. This resolution follows the Consumer Financial Protection Bureau's (CFPB) dismissal of a related enforcement action against the company and underscores the value of continued attorney general enforcement efforts in the wake of the Trump Administration’s cuts to the CFPB. 

“Capital One misled consumers through false marketing and a lack of transparency regarding its savings account system, cheating consumers nationwide. Given an opportunity to make loyal customers whole, Capital One sank their teeth in even more, attempting to underpay people it harmed and continue its deceptive practices," said Attorney General Bonta. "My office proudly stepped in and called this out for what it was: unacceptable and hopelessly inadequate. California consumers deserve a fair deal and someone fighting in their corner. We celebrate a settlement of more than double what was initially brought to the table. I thank my friend and colleague, New York Attorney General Letitia James, for leading this effort and taking further action to hold Capital One accountable.”

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. This saved Capital One nearly $3 billion in interest. 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 September, Attorney General Bonta joined 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 and $125 million in future additional interest payments while allowing Capital One to continue to underpay 360 Savings customers’ interest. After Attorney General Bonta 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 this week, will require Capital One to pay $425 million in restitution. 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 and providing an estimated $530 million to consumers nationwide in future additional interest.