The state attorneys general argue that the settlement would shortchange Capital One customers who they allege the bank cheated out of interest on saving accounts, the Office of the New York State Attorney General said in a Wednesday press release.
New York Attorney General Letitia James said in the release that Capital One is “pushing a settlement agreement that would let it off the hook for this illegal scheme.”
“I am leading a bipartisan coalition of attorneys general in opposing this unfair settlement so we can truly hold Capital One accountable and get fair restitution for customers who were cheated,” James said in the release.
Reached for comment by PYMNTS, a Capital One spokesperson said in an emailed statement: “Capital One strongly denies the lawsuit’s allegations. However, to avoid the risks and uncertainties associated with prolonged litigation, a reasonable settlement for all parties has been reached with the class action counsel.”
Reuters reported Wednesday that a lawyer for the depositors, Philip Black, said the proposed settlement is a “good deal” for depositors in comparison to the risks of further litigation.
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The proposed settlement on May 16 involved a lawsuit in which customers accused Capital One of falsely promising high interest rates on its 360 Savings accounts while offering much better rates to new customers on its 360 Performance Savings accounts.
The report said Capital One would pay 360 Savings depositors $300 million to cover interest they could have gotten with 360 Performance Savings accounts as well as $125 million in interest to depositors who still have 360 Savings accounts.
New York sued Capital One in a separate lawsuit filed days earlier, on May 14, with James saying the state sought to “ensure that Capital One does not escape accountability” after the U.S. Consumer Financial Protection Bureau dropped a case against the bank in which the regulator made similar allegations about the savings accounts.
