Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
As Yogi mentioned in his earlier post, it's a common practice of internet banks to draw money in with high rates, then lower the rates on those accounts while creating yet another new high rate account type. Capital One did this with its 360 Savings (old) and 360 Performance Savings (new). Several other banks have done this as well.
As much of a fan as I am of CFPB, its press release (as reported by Yahoo) is somewhat misleading. It compares the two Capital One accounts, but not over the same time periods.
The CFPB said Capital One lowered and froze its 360 Savings account’s APY to 0.30 percent from late 2019 to mid-2024, while it increased the new 360 Performance Savings account’s APY from 0.40 percent to 4.25 percent between April 2022 and January 2024.
Performance Savings always had higher rates, granted. However, the CFPB omits the fact that Capital One lowered the interest rate on Performance Savings account between late 2019 and autumn 2020, just as it did with the older Savings account rate. By late summer 2020 the rate difference between the two accounts had closed to 10 basis points. The lowering of rates was not an issue, regardless of the CFPB statement.
What were issues were the rate difference between the two account types (at all times) and the freezing of one account's rate while the other's was raised.
From friend's statements and depositaccounts.com chart here):
One more brick in the wall. I don't even bother to keep score anymore. I just flat-out will not ever trust any of the Big Banksters with a penny of my money. They all suck slime.
I had savings and checking at Capone but several years ago I did away with the savings account and now keep excess cash in a Vanguard MM. It's just a couple clicks to move money between them. At one time they were competitive but that went away pretty fast when rates started going up.
It's not just the big banks that play these games. Many institutions do. One can counter by being ever vigilant and moving money around from bank to bank. I did this for a time when I was between homes and had cash proceeds from the sale of my old home. Now I find it more practical to stick with an institution that consistently pays moderately high rates even if not the very top rates. (And to use MMFs, T-bills, etc.)
Whatever you do, keep your hand on your wallet at all times.
Speaking of wallets and not trusting Big Banksters with a penny of your money, what's in your wallet? If you have Fidelity's card, that's issued by Elan Financial Services, a subsidiary of US Bank, the fifth largest US Bank. Though you wouldn't know that by asking Google what it thinks are the largest banks; it omits US bank from its list.
Elan is behind CCs issued by 1300 different banks and credit unions. As CFSB writes, "The name that you are looking for [may not be] the actual issuer's name (for example, "ABC Card" is issued by XYZ Bank)."
Comments
https://www.mutualfundobserver.com/discuss/discussion/comment/159297/#Comment_159297
Barron's doesn't think that it would hurt COF & DFS merger.
https://www.barrons.com/articles/capital-one-stock-cfpb-lawsuit-1041890d
As much of a fan as I am of CFPB, its press release (as reported by Yahoo) is somewhat misleading. It compares the two Capital One accounts, but not over the same time periods. Performance Savings always had higher rates, granted. However, the CFPB omits the fact that Capital One lowered the interest rate on Performance Savings account between late 2019 and autumn 2020, just as it did with the older Savings account rate. By late summer 2020 the rate difference between the two accounts had closed to 10 basis points. The lowering of rates was not an issue, regardless of the CFPB statement.
What were issues were the rate difference between the two account types (at all times) and the freezing of one account's rate while the other's was raised.
From friend's statements and depositaccounts.com chart here):
Whatever you do, keep your hand on your wallet at all times.
Speaking of wallets and not trusting Big Banksters with a penny of your money, what's in your wallet? If you have Fidelity's card, that's issued by Elan Financial Services, a subsidiary of US Bank, the fifth largest US Bank. Though you wouldn't know that by asking Google what it thinks are the largest banks; it omits US bank from its list.
Elan is behind CCs issued by 1300 different banks and credit unions. As CFSB writes, "The name that you are looking for [may not be] the actual issuer's name (for example, "ABC Card" is issued by XYZ Bank)."
Here's CFPB's page that has the institutions actually issuing cards.
https://www.consumerfinance.gov/credit-cards/agreements/issuer/us-bank-national-association/
250 largest banks and 250 largest credit unions by assets held (Dec 2023):
https://personetics.com/resource-center/largest-banks-and-credit-unions-in-the-united-states/
Bank holding companies with the 20 largest credit card loan portfolios (March 2024):
https://www.americanbanker.com/list/20-bank-holding-companies-with-the-largest-credit-card-loan-portfolios-at-the-end-of-q4