federal judge preliminarily approved the company's revised $425 million to settle a lawsuit related to its 360 Savings accounts with depositors who said they were cheated out of high interest rates.
- The settlement comes after a federal judge rejected an earlier settlement in November.
- Under the new settlement, Capital One will pay $425 million in restitution, including an estimated $34 million to New Yorkers who had 360 Savings accounts.
Capital One shares plunged on Monday after a federal judge preliminarily approved the company's revised $425 million to settle a lawsuit related to its 360 Savings accounts with depositors who said they were cheated out of high interest rates.
The settlement comes after a federal judge in November rejected an earlier settlement where Capital One agreed to pay depositors $300 million to cover interest the depositors could have earned and $125 million of additional interest to depositors who still have the 360 savings account.
New Settlement
The settlement, which has been preliminarily approved by the court on Monday, will require Capital One to pay $425 million in restitution, including an estimated $34 million to New Yorkers who had 360 Savings accounts.
The settlement will also require Capital One to match 360 Savings and 360 Performance Savings interest rates, erasing the misleading two-tiered system of accounts at the heart of Attorney General James’ lawsuit and providing an estimated $530 million to consumers nationwide in future additional interest, according to a statement from Attorney General Letitia James.
“After Attorney General James led a bipartisan coalition of attorneys general in opposing an earlier proposed class action settlement that did not deliver enough for Capital One customers who were wronged, this new settlement more than doubles the value of the earlier one,” said Attorney General Letitia James in a statement.
Trump’s 10% Credit Card Rate Cap Fears
President Donald Trump on Friday said he was considering a one-year, 10% cap on credit card interest rates, arguing that current rates of 20%–30% are excessively high and that he was moving to fulfill one of his campaign promises.
Credit card companies are expected to get hit the most by this step if it is implemented, as their interest income will see a hit that typically accounts for the majority of credit card revenue and an even larger share of profit.
How Did Stocktwits Users React?
Retail sentiment around COF trended in ‘extremely bullish’ territory amid ‘extremely high’ message volume.
Shares of Capital One have risen nearly 33% over the past year.
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