US CFPB drops savings account lawsuit against Capital One
The US Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against Capital One just months after accusing the bank of “cheating consumers out of more than $2 billion in interest payments on savings accounts”.
CFPB drops Capital One lawsuit
In a statement announcing the lawsuit on 14 January, the CFPB alleged that Capital One “unlawfully misled consumers about its 360 Savings accounts and obscured its higher-interest savings product from them”.
In a statement reported by Reuters, the bank said at the time it was “deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration”.
In a court filing made on 27 February, the CFPB now states it voluntarily “dismisses with prejudice this action against all defendants”.
In response to the news, Capital One told CNN: “We welcome the CFPB’s decision to dismiss this action, which we strongly disputed.”
The CFPB has also recently dismissed numerous other lawsuits initiated under the Biden administration, including cases against TransUnion and peer-to-peer (P2P) lending platform SoLo Funds.
These developments come hot on the heels of the arrival of Russel Vought, the recently appointed head of the Office of Management and Budget, as the new CFPB director.
Replacing acting director Scott Bessent, who in turn replaced Biden-era CFPB director Rohit Chopra shortly after the inauguration of Donald Trump as US President, Vought has been implementing the Trump administration’s agenda to scale back the CFPB’s remit.
According to numerous media reports, an internal email sent by the new head to all CFPB staff in February reportedly carried instructions to suspend much of the regulator’s activities.
In a statement on social media platform X in February, Vought also announced: “I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not ‘reasonably necessary’ to carry out its duties. The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment.”
