Maryland Attorney General Joins Multi-State Coalition to Oppose Capital One Settlement

Maryland Attorney General Anthony G. Brown has joined a bipartisan coalition of 18 state attorneys general in opposing a proposed class action settlement that they argue would inadequately compensate Capital One customers who were allegedly denied billions of dollars in interest. The coalition has filed an amicus brief with the court, asserting that the settlement fails to hold Capital One accountable for deceptive practices and would ultimately benefit the company at the expense of its customers.

The attorneys general contend that Capital One marketed its 360 Savings accounts as offering high interest rates, comparable to or exceeding national averages. However, beginning in 2022, as broader interest rates began to increase, Capital One allegedly maintained artificially low interest rates on these accounts. Concurrently, the company introduced a nearly identical account, “360 Performance Savings,” which offered significantly higher interest rates, reportedly more than 14 times greater than those on the 360 Savings accounts at one point. This strategy, according to the coalition, allowed Capital One to mislead customers and retain billions in unpaid interest.

The proposed class action settlement offers $125 million in additional interest to eligible customers who maintain their 360 Savings accounts. However, the coalition argues this amount represents less than 7.5% of the interest they believe Capital One should have paid. They point out that within the timeframe required to disburse the $125 million, Capital One would have paid over $800 million in interest if those funds had been at the higher 360 Performance rate. Under the terms of the settlement, Capital One would retain over $2 billion in unpaid interest, while the average customer, who allegedly lost more than $717 in interest, would receive less than $54 in direct compensation.

Furthermore, the coalition is urging the court to reject the settlement due to its potential to impede enforcement actions. Capital One has reportedly argued that the class action settlement should prevent the New York Attorney General’s Office from pursuing restitution for customers through its separate lawsuit, which was filed after a prior action by the Consumer Financial Protection Bureau was dismissed. The coalition emphasizes that private agreements should not be used to hinder state-level enforcement efforts.

The states joining Maryland Attorney General Brown in filing the amicus brief include Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Ohio, Oregon, Rhode Island, and Washington.

Article by Mel Anara, based upon information from the Maryland Attorney General’s Office.

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