CFPB Drops Lawsuit Against Capital One Over 360 Savings Accounts – The Consumer Financial Protection Bureau (CFPB) has officially dropped its high-profile lawsuit against Capital One that alleged the bank had misled customers about interest rates on its popular 360 Savings accounts. The case, originally filed in January 2025, claimed that Capital One withheld more than $2 billion in interest from consumers by failing to inform them of better-yielding alternatives.
This move, made in February 2025, has sparked considerable debate in the financial world. While Capital One is celebrating the decision, consumer advocacy groups and lawmakers are voicing concern that this may weaken protections for ordinary savers.
CFPB Drops Lawsuit Against Capital One Over 360 Savings Accounts
| Topic | Details |
|---|---|
| Lawsuit | CFPB filed in Jan 2025 alleging over $2B in lost interest |
| Reason | Capital One allegedly failed to inform 360 Savings customers about higher-yielding 360 Performance Savings account |
| Resolution | CFPB dismissed the case with prejudice on Feb 27, 2025 |
| Impact | Capital One cleared; consumer groups concerned about lack of restitution |
| Official Source | CFPB Website |
The CFPB’s decision to drop its lawsuit against Capital One over the handling of 360 Savings accounts has stirred a national conversation. While the bank walks away free of legal consequences, millions of customers may have missed out on better returns without knowing it. Whether this sets a precedent for future consumer protection rollbacks—or sparks new reforms—remains to be seen.
If you’re a saver, review your account options today to ensure you’re not missing out on higher yields. Transparency is key—and staying informed is your best protection.
Why Was Capital One Sued by the CFPB?
The CFPB accused Capital One of deceptive practices that hurt millions of its savings customers. At the heart of the lawsuit was the 360 Savings account, a product that once offered competitive rates but was gradually overshadowed by Capital One’s 360 Performance Savings account, which featured higher interest rates.
Rather than automatically upgrading customers or adequately informing them about the better option, Capital One allegedly allowed customers to keep their money in lower-interest accounts, leading to billions in missed earnings.
The Allegation
According to the CFPB:
“Capital One lured consumers with a high-yield savings account, then quietly launched a newer, better account without telling them—resulting in over $2 billion in lost interest over years.”
The agency believed the practice violated federal consumer protection laws, including the Consumer Financial Protection Act, which prohibits deceptive financial practices.
What Prompted CFPB to Drop the Lawsuit?
In a surprising turn, the CFPB voluntarily dismissed the lawsuit with prejudice on February 27, 2025, meaning it cannot refile the same claim again. The decision aligns with broader changes under the Trump administration, which has called for less aggressive enforcement by the CFPB.
Capital One responded with relief, stating:
“We have always acted in the best interest of our customers. The dismissal validates our position.”
However, the move was met with criticism from multiple corners, especially consumer advocacy organizations like the Consumer Federation of America, which argued that it leaves millions without restitution.
Political Context: Changing Priorities
The dismissal also highlights a shift in regulatory priorities. Under the previous administration, the CFPB aggressively pursued banks over consumer harm. The current administration appears focused on deregulation and industry cooperation, leading to the rollback of pending lawsuits including cases against Capital One, Rocket Homes, and TransUnion.
No Settlement, No Penalty
Notably, Capital One did not have to pay any fine or settlement. This has led critics to claim that the CFPB missed an opportunity to recover funds for affected savers.
What Is the Difference Between Capital One’s 360 Savings and 360 Performance Savings?
To better understand the controversy, here’s a quick breakdown of the two products:
360 Savings Account
- Originally promoted as a high-yield savings option
- Over time, interest rates dropped
- Many users held large balances unaware of better alternatives
360 Performance Savings Account
- Launched later with significantly higher APY
- Available to new customers and those who actively switched
- Not automatically offered to existing account holders
The CFPB’s case alleged that Capital One failed to notify 360 Savings users about the newer, better product, effectively denying them fair financial benefits.
Who Is Affected by the Lawsuit Withdrawal?
The primary group affected are the existing or former 360 Savings customers who may have unknowingly missed out on better returns over several years. Unfortunately, with the case now dropped, these customers are unlikely to receive compensation unless further legal or legislative action is taken.
The ruling may also set a precedent for how financial institutions communicate product updates, potentially relaxing the standard for customer disclosures.
Expert Opinions and Industry Reaction
Consumer Advocates: “A Loss for the People”
Groups such as the National Consumer Law Center and Consumer Federation of America expressed disappointment. In their view, the lawsuit was a rare chance to hold a major bank accountable for opaque practices.
“This isn’t just about interest rates. It’s about honesty and transparency,” said an NCLC spokesperson.
Financial Industry: “Relief from Overreach”
Banking insiders argue that the lawsuit was too aggressive, claiming that customers always had the ability to explore better products. They point to Capital One’s public product comparison tools as evidence of transparency.
What Should Capital One Customers Do Now?
If you’re a Capital One customer or use any online savings account, here’s how to ensure you’re not leaving money on the table:
1. Review Your Current Interest Rate
Login to your bank account and check your APY (Annual Percentage Yield). If it’s lower than the bank’s advertised top-tier rate, you might not be in the best product.
2. Ask Your Bank About Alternatives
Reach out and ask directly: “Am I in your highest-yielding savings product?” Many banks require you to opt-in or open a separate account for better rates.
3. Compare with Other Banks
Sites like Bankrate or NerdWallet provide updated lists of high-yield savings accounts. Some banks currently offer 4.00%+ APY, while older accounts might pay under 1%.
4. Switch If Necessary
If your bank isn’t competitive, don’t hesitate to move your funds. Many online banks offer fast digital onboarding and FDIC insurance up to $250,000.
What This Means for CFPB’s Future Role?
This lawsuit’s dismissal is being seen by many as a watershed moment for the CFPB. Critics fear it may embolden financial institutions to reduce transparency or segment their customer base without proper notification.
Others argue it could mark a more balanced enforcement approach, focusing on truly predatory actors instead of debatable gray areas.
Meanwhile, several members of Congress have called for hearings into the CFPB’s enforcement direction and whether consumer interests are still being prioritized.
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FAQs About CFPB Drops Lawsuit Against Capital One Over 360 Savings Accounts
Q1. Why did the CFPB sue Capital One in the first place?
The CFPB claimed that Capital One misled customers by not informing them about better savings accounts, resulting in over $2 billion in lost interest.
Q2. What does “dismissed with prejudice” mean?
It means the lawsuit has been permanently dropped and cannot be refiled on the same grounds.
Q3. Will customers get any money back?
As the case was dismissed, no compensation will be awarded unless customers pursue independent legal actions or class-action suits emerge.
Q4. Should I move my money to another savings account?
Yes—if your current APY is low, it’s worth exploring other banks or newer savings products. Look for accounts offering 4.00% APY or more.
Q5. How can I file a complaint with the CFPB?
You can file a complaint directly through the CFPB’s official page: Submit a Complaint
Q6. What does this mean for financial transparency?
Many fear the case’s dismissal sets a precedent where banks may not feel obligated to clearly communicate product updates, especially if enforcement is softened.
