Latest news with #360Savings
Hindustan Times
29-05-2025
- Business
- Hindustan Times
Capital One $425M settlement: Here's everything you need to know
Capital One has agreed to pay $425 million to customers who had a 360 Savings account since September 18, 2019, Yahoo Finance reported. This comes after a class-action lawsuit claimed the bank didn't share key information about better interest rates. A federal court in Alexandria, Virginia, approved the deal after several customers sued Capital One. The lawsuit said the bank didn't offer competitive interest rates and didn't tell account holders when better options became available. Instead of updating the rates on existing 360 Savings accounts, Capital One created a new product called the 360 Performance Savings account, which offered higher interest. But they didn't let current customers know about it. According to the Consumer Financial Protection Bureau (CFPB), Capital One saved over $2 billion by keeping this two-tier system and not updating customers. Also Read: Capital One Financial set to buy Discover Financial Services for whopping $35 billion If you've had a Capital One 360 Savings account since September 2019, you may be eligible for a payment. Check the official settlement website – Claim forms will be available after the court gives final approval. Watch for a notice – You'll get a message by email or mail if you're eligible. No lawyer needed – The process is simple and can be done on your own. $300 million will go to customers who missed out on higher interest earnings. How much you get depends on how long you had your account. $125 million will go to people who still have a 360 Savings account. These accounts will also start earning double the national average interest rate, as set by the FDIC.
Yahoo
20-05-2025
- Business
- Yahoo
Capital One closes Discover deal, agrees to $425M payout
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Capital One completed its acquisition of Discover on Sunday, to close the richest banking deal of the past six years and create the nation's largest credit card issuer. The bank, over the weekend, also made headway in one of the major court cases against it – a class-action lawsuit brought in the U.S. District Court for the Eastern District of Virginia by customers who held Capital One 360 Savings accounts. Capital One agreed Friday to pay $425 million in restitution to people who held the savings accounts at any point from Sept. 18, 2019, onward. That's the date on which Capital One launched its 360 Performance Savings product. But plaintiffs argue the bank concealed certain details from 360 Savings account holders to avoid paying existing customers the new product's higher interest rate. The disparity in returns between the two account products grew in earnest in 2022, when the Federal Reserve began to raise interest rates. Capital One froze its 360 Savings rate at 0.3% at that time, but increased its 360 Performance Savings rate to as high as 4.35%, plaintiffs have noted. That has spurred legal action from regulators, too. New York Attorney General Letitia James sued Capital One last Wednesday over the same savings accounts. That lawsuit, in turn, continued a push the Biden-era Consumer Financial Protection Bureau first made in January, alleging Capital One 'cheat[ed] millions of consumers out of more than $2 billion in interest.' The CFPB, under a newly reelected Donald Trump, dismissed the lawsuit in February. As part of Friday's agreement, Capital One will pay $300 million to class members – prorated based on the amount of interest they would have earned if their 360 Savings account had paid the same interest rate as 360 Performance Savings accounts. The remaining $125 million will represent additional interest payments to the roughly 75% of class members who continue to hold the legacy savings account product. For that part of the settlement, Capital One must maintain an interest rate on its 360 Savings accounts that is double the Federal Deposit Insurance Corp.'s calculation of the national average for savings deposit accounts. A judge must sign off on the agreement for it to take effect. The formal settlement agreement will be filed by June 6, along with plaintiffs' motion seeking preliminary approval. The Virginia case had been set to go to trial July 21. In the agreement, Capital One admitted no wrongdoing. In closing its acquisition of Discover, Capital One met a timeline it adjusted in February. 'This deal brings together two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences to consumers, businesses and merchants,' Capital One CEO Richard Fairbank said in a statement Sunday. The development caps a 15-month waiting game for two behemoths that proposed combining in February 2024. The Fed and Office of the Comptroller of the Currency approved the tie-up in April, – but with conditions. The Fed fined Discover $100 million over a pricing misclassification issue that has plagued the company for years. The Fed issued a consent order on the matter, in coordination with the Federal Deposit Insurance Corp. — which brought heavier penalties. The FDIC issued three orders against Discover last month — one carrying a $150 million fine; one requiring the company to distribute at least $1.225 billion in restitution to overcharged customers; and one amending its 2023 consent order related to the price misclassification issue. The OCC's approval hinges on Capital One submitting a plan, within 120 days, on the actions it plans to take to address the causes of the enforcement actions against Discover — and the timeline. The $35.3 billion acquisition has long stood as a test case for bank combinations under the Trump administration, and has faced pushback – even after regulators' approval – from Democratic lawmakers, most notably Sen. Elizabeth Warren, D-MA. Warren in April accused regulators of 'rubber-stamp[ing]' the deal and wrote the Fed and the Justice Department in recent weeks. She urged the Fed to reconsider its decision, arguing the central bank ignored input from other regulators and insufficiently considered the transaction's effects on low-income consumers, competition and financial stability in the U.S. Last week, Warren wrote the DOJ to persuade it to sue to block the deal. As it stands, Capital One will gain access to Discover's network through the deal – and also boost its assets to around $660 billion, making it the nation's eighth-largest bank. Capital One added three members to its board of directors Sunday: Discover's board chair, Tom Maheras; its interim CEO, Michael Shepherd; and Reddit Chief Operating Officer Jennifer Wong. The bank also reiterated Sunday it would begin implementing the five-year, $265 billion community benefits plan it announced last July. Recommended Reading Judge in CFPB case 'leaning' toward injunction
Newsweek
19-05-2025
- Business
- Newsweek
Capital One Settlement: Here's Who's Eligible for $425 Million Payout
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Capital One has agreed to pay $425 million to settle a class-action lawsuit over allegations it withheld higher interest rates from certain savings account customers, according to federal court filings reviewed by The New York Times. The settlement, which awaits a judge's approval in the U.S. District Court for the Eastern District of Virginia, covers nationwide litigation brought by depositors who said they missed out on higher earnings due to the bank's handling of its 360 Savings and 360 Performance Savings accounts. As outlined in the court documents, Capital One did not admit wrongdoing but agreed to compensate affected customers for foregone interest and provide additional payments to those holding certain accounts. Why It Matters With interest rates rising rapidly since 2022, many consumers have become increasingly sensitive to the rates offered on their deposits. The case highlights growing public scrutiny of banking practices and transparency around financial products amid heightened regulatory focus. Banks are adapting their offerings after the Federal Reserve's interest rate hikes. In this photo illustration, the logo of Capital One Financial Corporation is displayed on a smartphone screen, with the company's stock market performance and candlestick chart visible in the background, highlighting Capital One's financial activity... In this photo illustration, the logo of Capital One Financial Corporation is displayed on a smartphone screen, with the company's stock market performance and candlestick chart visible in the background, highlighting Capital One's financial activity and its position in the U.S. banking, credit card, and financial services sectors, on April 20, 2025, in Chongqing, China. MoreWhat To Know Who Is Eligible for a Payout? The settlement covers customers who held a Capital One 360 Savings account since September 18, 2019, when the bank launched its 360 Performance Savings product. These individuals are considered 'class members' in the Eastern District of Virginia case. Specifically, eligibility consists of: Anyone who had a 360 Savings account with Capital One from September 18, 2019, through the present, regardless of whether the account is still open or has since been closed. The $300 million payout pool will be distributed to all eligible account holders, with individual amounts calculated based on the interest the customer would have earned if their 360 Savings account matched the rates of the 360 Performance Savings accounts during the same period. As of the settlement date, an additional $125 million is designated for customers with 360 Savings accounts. These account holders will receive further interest payments. Capital One must maintain an interest rate at least double the national average for savings accounts set by the Federal Deposit Insurance Corporation (FDIC) for this group. Details on Payout Calculation Payment amounts will vary for each class member, being prorated by the potential interest they missed. This means that the longer a customer held a 360 Savings account during the eligible dates and the higher their balance, the larger their share of the settlement. Customers who switched to 360 Performance Savings or closed their accounts remain eligible for a portion of the $300 million reserved for lost interest. Why Are These Customers Getting Paid? The lawsuits claimed that Capital One advertised its legacy 360 Savings account as offering competitive interest rates, while failing to inform or encourage existing accountholders to switch to the newer 360 Performance Savings account, which offered substantially higher rates (as much as 4.35% at times compared to 0.3% fixed for 360 Savings). This rate disparity widened as the Federal Reserve raised interest rates in 2022. Plaintiffs argued that customers were deprived of potential earnings as a result. Are All Capital One Customers Included? No. Only those who held a 360 Savings account during or after September 18, 2019, are eligible. The settlement does not automatically include 360 Performance Savings customers or individuals with other account types. Additionally, the agreement does not cover claims raised by the New York Attorney General's separate lawsuit, which remains ongoing. Legal Fees and Next Steps Legal fees for class-action attorneys will be paid from the settlement fund. Judge approval is required before payments begin, with a formal hearing set and preliminary approval to be filed by June 6. What People Are Saying Letitia James, New York Attorney General, said in a news release: "Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice. Big banks are not allowed to cheat their customers with false advertising and misleading promises." Capital One spokesperson said in a company statement: "Our flagship 360 Performance Savings product was marketed widely, including on national television, and has always been available in just minutes to all new and existing customers without any of the usual industry restrictions." Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "One of the few economic bright spots of rising rates in recent years has been in savers gaining more interest on their accounts. In this situation, though, those with existing accounts noticed their interest rate failed to match the ones being offered to new customers of Performance Savings Account and took legal action. Settlements like this could serve as a warning for financial institutions in the future looking to entice new customers with promotional rates. Neglecting existing customers with existing rates could backfire in a big way." Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "This is exactly why the Consumer Financial Protection Bureau (CFPB) exists – to guard against this kind of behavior. But as we've seen, the more we deregulate, the more common these cases become." "As for the settlement, it's likely to be a typical 'pay without admitting guilt' deal. The issue here is that customers claim their savings accounts were capped at 0.3 percent interest, while the bank offered similar accounts paying up to 4.35 percent, effectively pocketing the spread. This isn't new – it's a classic case of exploiting the knowledge gap between the institution and its clients." Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: "As always in these types of cases, once legal fees are paid and other costs are factored in, the average account holder will receive a fraction of the actual amount they were due." "This is another example of why the individual saver must be diligent in checking and double checking for updates and new programs. These big corporations are not looking out for the little guy, and with Capital One having completed their takeover of Discover Financial Services and becoming even bigger, we should not expect things will change for the better." What Happens Next The preliminary settlement requires court approval, with a final hearing expected by mid-June 2025. After judicial approval, settlement administrators will notify eligible class members regarding payout procedures. The court process will define timelines for when former and current 360 Savings account holders will receive payments from the settlement fund. "This may be one of the last settlements of its kind if Russell Vought and others succeed in scaling back the CFPB's power," Thompson said. "If that happens, expect even less accountability from financial institutions in the future."
Yahoo
19-05-2025
- Business
- Yahoo
Capital One Agrees to Pay $425M to Settle Savings Account Lawsuit
Capital One Financial Corporation COF has agreed to pay $425 million to settle a lawsuit accusing it of deceiving savings account depositors. On Friday, a notice was filed describing the preliminary settlement in U.S. federal court in Alexandria, VA., as reported by Reuters. Capital One was sued by depositors who claimed that the company had deceitfully promised high interest rates on 360 Savings accounts while offering new customers greater rates on 360 Performance Savings accounts. According to the 360 Savings depositors, Capital One maintained their rates at 0.3% while providing 360 Performance Savings depositors with rates that peaked at 4.35% at the beginning of the previous year. The yield on the higher-yielding account is currently 3.6%. In accordance with the settlement, Capital One will reimburse $300 million to 360 Savings depositors for interest that they could have been entitled to on 360 Performance Savings accounts. Depositors who still have 360 Savings accounts will get an additional $125 million in interest from the company. The settlement covers depositors with 360 Savings accounts at any time since September 18, 2019. Legal fees will be paid by the settlement. Over the past six months, COF shares have gained 9.5% compared with the industry's rise of 13.6%. Image Source: Zacks Investment Research Currently, Capital One carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. This month, UBS Group AG UBS agreed to pay $511 million to resolve a tax probe by the U.S. Department of Justice ('DOJ') against Credit Suisse for preparing false income tax returns and tax evasion. UBS Group AG acquired Credit Suisse in 2023. The two-year investigation by the DOJ, initiated before UBS acquired Credit Suisse, found that Credit Suisse aided and assisted in tax evasion through its 475 offshore accounts in the preparation of false tax returns to conceal more than $4 billion from the US Internal Revenue Service. The United States DOJ reported that most of this misconduct occurred between 2014 and June 2023. In March 2025, Robinhood Markets Inc.'s HOOD units — Robinhood Financial and Robinhood Securities — agreed to pay $26 million to settle Financial Industry Regulatory Authority ('FINRA') allegations for failing to respond to red flags about potential misconduct and not verifying the identities of thousands of customers. FINRA also ordered HOOD to pay $3.75 million in compensation to the trading platform's customers. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Capital One Financial Corporation (COF) : Free Stock Analysis Report UBS Group AG (UBS) : Free Stock Analysis Report Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Miami Herald
18-05-2025
- Business
- Miami Herald
Capital One to pay $425M to settle suits over savings accounts
Capital One agreed to pay a $425 million settlement after it faced nationwide litigation accusing it of cheating savings depositors out of higher interest rates by failing to advertise higher-yield accounts, according to a federal court filing. The preliminary settlement, which is pending a judge's approval, was filed in a notice Friday in the U.S. District Court for the Eastern District of Virginia. Depositors who sued the bank said that Capital One falsely promised higher interest rates on 360 Savings accounts, which had a fixed rate of 0.3%, and did not adequately advertise its better rates on 360 Performance Savings accounts. The higher-yield account had an interest rate that was as high as more than 4%, according to the suit. As a part of the settlement, $300 million will go to depositors to make up for the interest they would have earned in the higher-yield account. The remainder of the settlement will go to depositors with open 360 Savings accounts as additional interest. Legal fees will also be paid out of the settlement. As a part of the agreement, Capital One admitted no wrongdoing. Representatives for Capital One and several lawyers for the plaintiffs did not immediately respond to requests for comment Saturday. The litigation in Virginia was combined from several separate lawsuits across the country. On Wednesday, Letitia James, the New York attorney general, sued Capital One on behalf of depositors in her state for failing to notify 360 Savings account customers, who faced 'artificially low' rates, that they could have switched to the account with better interest rates, according to a news release. 'Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice,' James said in the news release. 'Big banks are not allowed to cheat their customers with false advertising and misleading promises.' The suit brought by James was not subject to the settlement filed Friday. Capital One said it would defend itself in court and rejected her claims. The Consumer Financial Protection Bureau similarly sued the bank at the close of President Joe Biden's term in January, arguing that Capital One cheated consumers out of more than $2 billion in interest payments. The Trump administration has since dropped that case. This article originally appeared in The New York Times. Copyright 2025
