Finance

New York AG James sues Capital One after Trump’s CFPB drops claims

Published

3 weeks ago

May 14, 2025

The logo for consumer lending firm Capital One Financial Corp is seen on its headquarters on January 20, 2023 in McLean, Virginia. The company has reportedly eliminated up to 1,100 technology positions this week as its digital structure matures.

Win Mcnamee | Getty Images News | Getty Images

New York Attorney General Letitia James sued Capital One on Wednesday, accusing the bank of “cheating” customers out of millions of dollars in interest payments – just months after the Trump administration’s Consumer Financial Protection Bureau dropped a similar suit against the financial institution.

In a complaint filed in Manhattan federal court, James alleged that Capital One marketed its “360 Savings” account as its high-yield savings account, then left those customers in the dark by failing to inform them about its new “360 Performance Savings” product that offered substantially higher interest rates.

As interest rates rose starting in 2022, the state attorney general’s office said, Capital One froze the interest rate of its 360 Savings product at 0.3%, while increasing the rate of the 360 Performance Savings accounts to as high as 4.35%, meaning New York 360 Savings customers lost out on “millions of dollars of interest.”

The suit further alleges that Capital One instructed its employees not to tell 360 Savings customers about the new product “unless they explicitly asked.”

The complaint mimics litigation by the CFPB, which was dropped in February under Trump-era CFPB Acting Director Russell Vought. That suit alleged Capital One’s marketing led U.S. customers to miss out on more than $2 billion in interest.

The dropped CFPB case is among a slew of other enforcement lawsuits that the agency pursued under previous CFPB director, Rohit Chopra, and that have been dismissed by President Donald Trump’s administration.

“Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice,” James said in a statement Wednesday. “Big banks are not allowed to cheat their customers with false advertising and misleading promises.”

Capital One did not immediately respond to CNBC’s request for comment Wednesday. The bank disputed the CFPB allegations earlier this year and told CNBC that it transparently marketed its 360 Performance Savings account.

The New York suit accuses Capital One of violating state and federal law and seeks “restitution and damages for all affected Capital One customers.”

Finance

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Published

2 hours ago

June 4, 2025

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Finance

Retirement account balances dip in Q1 2025 as savings rates hit record high

Published

4 hours ago

June 4, 2025

Business Finance News

Jack Otter and the ‘Barron’s Roundtable’ panelists share their best tips for how to prepare for retirement amid a market concerned with tariffs.

Retirement account balances dipped in the first quarter due to stock market turbulence. Still, people kept socking away money for their retirement, according to new data from Fidelity Investments.

The financial services company analyzed more than 50 million retirement accounts, finding that the average balances of 401(k), IRA and 403(b) accounts all saw small declines during the first three months of 2025.

The average 401(k) account balance decreased 3% quarter over quarter to $127,100, according to Fidelity Investment’s Q1 2025 retirement analysis.

IRA accounts had average balances of $121,983 and 403(b) accounts held $115,424 on average in the first quarter, 4% and 2% lower than the prior quarter, respectively.

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Fidelity largely attributed those declines to “market swings.”

The market was turbulent during the first quarter amid uncertainty surrounding tariffs and other policy issues, including popular index funds.

Still, retirement savings rates “stayed consistently high,” according to Fidelity.

For 401(k) accounts, employee contribution rates hit 9.5% during the first quarter, with the employer contribution rate coming in at 4.8%, according to its analysis.

Combined, the 14.3% savings rate for 401(k) accounts marked a “record” and the “closest it’s ever been to Fidelity’s suggested savings rate of 15%,” the company said.

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Holders of 403(b) accounts, meanwhile, had a rate of 11.8% on average.

“Although the first quarter of 2025 posed challenges for retirement savers, it’s encouraging to see people take a continuous savings approach which focuses on their long-term retirement goals,” Sharon Brovelli, president of workplace investing at Fidelity, said in a statement. “This approach will help individuals weather any type of market turmoil and stay on track to reach their retirement goals.”

During the first quarter, which was plagued with market volatility, 17.4% of 401(k) holders upped the size of their contributions, while only 4.9% lowered theirs, the report found.

Meanwhile, contribution rates among 14.6% of 403(b) holders went up in the first quarter.

Only a small percentage of people with those types of retirement plans altered their asset allocation during the first quarter, with just 6% of 401(k) users doing so and 4.7% for 403(b), it found.

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Fidelity’s analysis also showed that people with IRAs upped the amount of money that they put in those retirement accounts in the first quarter by 4.5% compared to 2024’s first quarter.

A separate survey released Monday by Gallup found 59% of U.S. adults have funds put away in a retirement savings account.

Among those with retirement savings plans that have not yet left the workforce, half reported they “expect to have enough to live comfortably in retirement,” according to Gallup.