Maryland Consumers to Receive Increased Relief in Revised Capital One Settlement

Maryland Attorney General Anthony G. Brown has announced a significant revision to a settlement with Capital One, which will now provide $425 million in restitution and improved interest rates for customers who were allegedly underpaid on their 360 Savings accounts. This new agreement more than doubles the value of an earlier proposed settlement after Attorney General Brown joined a bipartisan group of state attorneys general to advocate for greater consumer relief. The court has officially approved this revised settlement.

The original issue stemmed from Capital One’s marketing of its 360 Savings accounts, which were advertised as offering “high interest” and competitive rates. However, beginning in 2022, as interest rates across the nation began to rise, Capital One allegedly maintained artificially low rates for its 360 Savings customers. Concurrently, the bank introduced a new product, “360 Performance Savings,” which offered substantially higher interest rates, at times exceeding those of the 360 Savings accounts by more than fourteen times. This created a disparity where new customers could access significantly better returns than existing customers with similar accounts.

In response to this situation, Attorney General Brown participated in filing an amicus brief that opposed an initial class-action settlement. This earlier proposal would have provided less than $300 million in restitution and allowed Capital One to continue offering lower interest rates on its 360 Savings accounts. The court ultimately rejected this initial settlement due to the objections raised by Attorney General Brown and the coalition of attorneys general.

The newly approved settlement addresses these concerns by requiring Capital One to provide more substantial restitution to affected customers. Beyond the direct restitution payments, the agreement mandates that Capital One align the interest rates of its 360 Savings and 360 Performance Savings accounts. This action aims to eliminate the alleged two-tiered system and is projected to provide an additional $530 million in future interest earnings for consumers nationwide. The settlement’s terms are enforceable by Maryland and the other eight participating states.

This revised settlement means that Capital One customers who were impacted by the disparity in interest rates will receive greater financial compensation. The improved interest rates on savings accounts are intended to benefit consumers directly by increasing their earnings on deposited funds. Residents who held 360 Savings accounts during the period in question may be eligible for restitution payments.

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

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