TLDR
- Judge backs revised Capital One settlement, clearing the way for final approval ahead.
- Deal delivers $425M in restitution to affected 360 Savings customers nationwide.
- Capital One must align 360 Savings rates with higher-yield Performance accounts.
- States’ objections reshaped the deal after years of alleged low-rate practices.
- Settlement aims to end rate gaps and restore trust among long-time savers.
A revised settlement moved forward on Monday after a federal judge granted preliminary approval in the long-running Capital One savings rate dispute. The updated agreement directs $425 million in restitution to 360 Savings customers and aligns future interest rates across similar accounts. The approval marked a major shift in the case and set a clear path toward final resolution.
Revised Accord Gains Court Approval
The federal court issued its ruling after reviewing new terms that addressed earlier objections raised by several states. Capital One agreed to raise interest rates for 360 Savings accounts to match rates offered through its 360 Performance Savings accounts. The adjustment will deliver future interest benefits estimated at $530 million for affected customers.
The updated structure resolved concerns that the earlier proposal had returned too little and kept depositors in low-yield accounts. Judge David Novak signaled that the revised plan corrected those shortcomings and offered meaningful financial relief. He also scheduled an April hearing to determine final approval and close the matter.
The settlement instructs Capital One to maintain both account types for at least two years while applying identical rates. The bank will distribute restitution funds after fees and administrative costs receive court authorization. The court noted that the improved terms addressed widespread dissatisfaction among depositors and state officials.
State Action and Regulatory Pressure Influence Outcome
New York played a central role in challenging the earlier settlement and pushed for stronger terms for customers nationwide. The New York Attorney General filed a separate lawsuit accusing Capital One of misleading savers through a dual-rate structure. The state said Capital One marketed high-interest accounts while offering significantly lower yields to long-time users.
Eighteen states supported opposition to the first settlement, and their efforts shaped the revised agreement. Their coordinated objections argued that depositors had lost substantial interest income during a period of rising national rates. The new settlement now resolves those concerns and creates equal treatment across similar accounts.
New York officials confirmed they would dismiss their separate lawsuit once the revised settlement receives final court approval. The case highlighted how rate discrepancies emerged as interest rates climbed in 2022 and widened gaps between similar accounts. Capital One’s later introduction of the 360 Performance Savings account accelerated the divergence and triggered legal scrutiny.
Market Impact and Broader Account Context
The settlement arrived as Capital One navigated broader market reactions to policy discussions affecting its credit products. Shares dropped earlier Monday after the U.S. president urged a temporary cap on credit card interest rates. The development added pressure on the company during a period of heightened regulatory focus.
Capital One previously merged with Discover Financial Services, which expanded its footprint in credit card lending. That acquisition increased attention on its interest-rate practices and customer policies. The savings-rate dispute therefore intensified public debate about transparency in consumer finance.
The 360 Performance Savings account currently yields 3.3% following recent shifts in benchmark rates. Capital One must now align both accounts and apply identical terms under the settlement. The agreement aims to prevent future rate disparities and ensure consistent treatment for all eligible savers.
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