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Judge Rejects Capital One’s $425 Million Settlement Offer

By  |  November 9, 2025

Capital One’s proposed $425 million settlement aimed at resolving claims over unpaid interest on 360 Savings accounts has been rejected by a federal judge, who ruled that the offer fell far short of adequately compensating customers. The bank, based in McLean, Virginia, had agreed to pay $300 million in unpaid interest to affected depositors, plus an additional $125 million in interest for those who still maintained their accounts, according to Reuters.

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    In a ruling issued Thursday, U.S. District Judge David Novak in Alexandria, Virginia, determined that the plaintiffs’ allegations warranted “significantly greater relief.” Per Reuters, Novak criticized the agreement for offering less than 10% of the total estimated damages to account holders while keeping them in lower-interest accounts, even as Capital One’s 360 Performance Savings accounts provided four to eight times higher returns. “These millions of class members would continue to experience the same financial harm that they have already experienced for years,” Novak wrote. He directed both sides to resume settlement discussions to revise the proposal.

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    Capital One did not immediately comment on the decision, and Philip Black, one of the attorneys representing the plaintiffs, also declined to speak on the matter, according to Reuters. Opposition to the settlement has been mounting from 18 states, including New York, which is separately suing the bank over similar issues. State officials have argued that the proposed deal would allow Capital One to continue underpaying 360 Savings account holders, who currently earn an effective rate of 0.78% compared to 3.4% for 360 Performance Savings depositors—a difference they estimate saves the bank over $2.5 billion annually.

    A spokesperson for New York Attorney General Letitia James declined to comment on the ruling, Reuters reported. Meanwhile, the U.S. Consumer Financial Protection Bureau had also filed a case against Capital One over the same accounts but later dropped it as the agency scaled back its enforcement efforts.

    The case is titled In re Capital One 360 Savings Account Interest Rate Litigation, U.S. District Court, Eastern District of Virginia, No. 24-md-03111.

    Source: Reuters