A U.S. District Judge in Washington, D.C., David Novak, rejected Capital One’s proposed $425 million settlement with depositors on November 6, 2025, ruling that the payout was too small to compensate the affected account holders.
The judge explained that the settlement would provide less than 10 % of the estimated damages for many class members and would not offer meaningful relief to those who still held the 360 Savings accounts. A coalition of 18 states, led by New York Attorney General Letitia James, had urged the judge to reject the settlement, arguing that it would allow Capital One to continue unfair practices and that the payout was insufficient to address the alleged harm.
The dispute stems from Capital One’s 2019 launch of the 360 Performance Savings account, which offered rates above 4 % while the existing 360 Savings accounts remained at 0.3 %. Plaintiffs allege that Capital One concealed the higher‑yielding account from existing customers to avoid paying them more interest, a claim that traces back to the bank’s acquisition of ING Direct USA in 2012.
Capital One has consistently denied wrongdoing. The bank’s legal team has said the settlement was intended to resolve the claims, but the judge’s order to resume negotiations means the parties must revisit the terms. The rejection leaves the bank exposed to ongoing litigation and potential further legal costs.
The decision raises reputational concerns that could erode customer trust and affect the bank’s deposit base, potentially impacting its financial stability and investor confidence. The outcome also signals that state regulators are willing to challenge large financial institutions on consumer‑interest‑rate practices, adding a regulatory headwind to Capital One’s operations.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.