New York Attorney General Letitia James is not having any of Capital One’s proposed class action settlement. According to a press release on the Office of the New York State Attorney General's website, she's spearheading a bipartisan group of a 17 other attorneys general to oppose a deal they find lacking. It's all about Capital One customers being shortchanged on interest—over $2 billion of it. AG James filed an amicus brief fighting the settlement that would have Capital One cough up $125 million, despite the much higher rates Capital One's "360 Performance Savings" accounts were getting.
The bone of contention here is that while interest rates climbed since 2022, Capital One kept their 360 Savings rates at rock bottom. Meanwhile, a similar account type, dubbed 360 Performance Savings, was receiving significantly higher returns. AG James has argued this discrepancy was a strategic move allowing the bank to avoid paying out billions it should have. "Capital One customers worked hard for their savings, only to be misled and cheated out of billions of dollars in interest payments that their bank had promised them," James said, as quoted in the Attorney General's Office press release. "Now, Capital One is pushing a settlement agreement that would let it off the hook for this illegal scheme."
According to AG James and her posse, the sweet deal Capital One is trying to get would not force any behavior change to prevent further misleading of customers. The proposed settlement throws $125 million at the problem, which sounds solid until you do the math. At the rate the 360 Performance Savings were going, over $800 million should have been paid out in the same timeframe. And while the bank's legally trying to cover its bases, James is intent on ensuring proper restitution for customers taken for a ride.
Capital One's defense apparently includes wanting the settlement to block AG James from securing further compensation via her lawsuit. The attorneys general have united in urging the court to put an end to that notion. The coalition's stand holds weight, with diverse representation across the country—from California to Ohio. The case, led in New York by Assistants Attorney General Chisolm Allenlundy and Adam J. Riff, is yet another example of regulators attempting to hold financial institutions accountable amidst a wave of consumer rights advocacy.
