Capital One has disclosed a potential enforcement action from the Consumer Financial Protection Bureau (CFPB) related to alleged misrepresentations about its savings accounts. The bank received a notice from the CFPB earlier this month, which indicated that the federal agency might proceed with enforcement or litigation.
This development traces back to a lawsuit filed by customers in 2022, who claimed they were not adequately informed of differences in interest rates between two of the bank’s accounts. Capital One had introduced its “360 Performance Savings” account, which featured a higher interest rate compared to the pre-existing “360 Savings” account. Plaintiffs in the lawsuit argued that Capital One failed to communicate these rate differences effectively, resulting in missed earning opportunities for customers.
Capital One, however, has argued it had the contractual right to adjust interest rates at its discretion and that the information about the newer account and its benefits was accessible on its website. In response to the customer lawsuit, Capital One filed a motion to dismiss the case.
The CFPB has not commented on the matter, though the agency’s probe coincides with Capital One’s pending $35.3 billion acquisition of Discover Financial Services, a move that could significantly impact the payments sector. This acquisition is currently under regulatory review, with additional scrutiny from New York Attorney General Letitia James, who is assessing whether the deal could breach state antitrust laws. In July, Capital One pledged $265 billion toward lending, philanthropy, and investments over five years if the acquisition proceeds.
The Wall Street Journal was the first to report on Capital One’s disclosure of the CFPB’s potential enforcement action.