New York Attorney General Letitia James is pushing back against a proposed class action settlement that she says would allow Capital One to escape full accountability for an alleged scheme that cheated customers out of more than $2 billion in interest. Joined by a bipartisan coalition of 17 attorneys general, James filed an amicus brief urging a federal court to reject a settlement she argues would shortchange consumers and benefit the bank that misled them.
The opposition stems from a separate class action agreement involving Capital One’s 360 Savings accounts. Attorneys general argue the deal offers only a fraction of what customers lost and fails to address the core issue: Capital One’s alleged strategy to advertise high-yield savings rates, then keep them artificially low while quietly offering a nearly identical account with significantly higher interest. James filed suit against Capital One in May, alleging that the company misrepresented its rates and deprived millions of customers of the earnings they were promised.
“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,” said Attorney General James. “Now, Capital One is pushing a settlement agreement that would let it off the hook for this illegal scheme.”
According to the state’s lawsuit, while national interest rates rose in 2022, Capital One maintained reduced rates for its 360 Savings accounts, simultaneously rolling out the 360 Performance Savings account with dramatically higher returns—at one point more than fourteen times greater. The attorney general’s office contends that the proposed settlement would not require Capital One to change this practice, meaning customers would continue receiving below-average interest despite earlier assurances.
The deal currently offers $125 million in back interest for 360 Savings account holders. But James and her colleagues argue that the bank would still retain more than $2 billion in unpaid interest, while the average customer—who may have lost more than $700—would recoup less than $54. They say the agreement fails to force policy changes, allowing Capital One to preserve the disparity between its savings products and continue profiting from customer confusion.
Capital One has also suggested that the settlement should block the state from pursuing further restitution through its lawsuit, a position James calls unacceptable. The coalition asserts that private litigation should not strip states of their authority to pursue enforcement or meaningful relief on behalf of residents.
Attorneys general from states including California, Colorado, Maryland, New Jersey, and Washington joined New York in the filing, marking a rare multistate response to what they view as an inadequate remedy for consumers.