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US consumer watchdog drops case against Capital One over cheating customers

Old_JoeOld_Joe
edited February 27 in Other Investing
Following are excerpts from a current report in The Guardian:

Agency had accused bank of cheating consumers out of more than $2bn in interest payments on savings accounts
The US Consumer Financial Protection Bureau on Thursday dropped a legal action against Capital One, which the agency had accused last month of cheating consumers out of more than $2bn in interest payments on savings accounts.

The dismissal continues Donald Trump’s rapid moves to dismantle the agency, which he has said should be eliminated, but comes the same day as his nominee to head the CFPB, Jonathan McKernan, testified before the Senate in a confirmation hearing. The action pointed to a broader retrenchment of CFPB enforcement actions under the Trump administration.

The agency earlier on Thursday had already dismissed a lawsuit brought last year against the student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA) accused of illegally collecting on student loans discharged in bankruptcy, and last week dropped a case against the online lender Solo Funds, which the agency had said deceived borrowers about loan costs.

Since taking office, Trump and his associate Elon Musk have vowed to destroy the CFPB, firing scores of staff, shutting its Washington offices and moving to cancel its lease, while placing virtually all agency workers on temporary leave, actions which employee unions and consumer advocates have challenged in court.

The administration has said in court filings, however, that it intends to operate a more streamlined and efficient CFPB, which Democrats say will be one wholly inadequate to meet the agency’s legal mandates.

In his confirmation testimony on Thursday, McKernan criticized the agency’s past enforcement actions as excessive but said if confirmed he would work to uphold the agency’s legal mandates.

“I’m fully committed to following the law fully and faithfully,” he said.

Comments

  • yogibearbullyogibearbull
    That will make it easier for the Fed and the OCC to approve Capital One/COF and Discover/DFS acquisition/merger if the DOJ doesn't object.

    I have COF accounts and I wasn't happy with the practices of COF. It introduced new types of a/c with higher interest rates without ever alerting or informing existing customers whose money could remain in older lower-paying a/c. I called to complain and was told to just open new a/c that was easy to do online - I did that. I don't know if this is cheating, but it's certainly bad business practice. If my COF a/c wasn't already linked to my several of my other a/c, I would have ditched it long time ago. I did however move much of the money out.
  • MarkMark
    Makes me wonder how much of Capital Ones $2 billion in savings will be deposited ti trumps pocket.
  • CrashCrash
    Stinks. All part of the coup. Big Money and Gummint in bed with each other. The rest of us can go screw. Any hint that gummint is supposed to serve the citizenry is GONE. Democracy? Don't look anywhere around the USA. Extinguished. Fascist Oligarchy is here. After the damage is done, it will take decades, I predict, to restore any sort of Normalcy and gummint of, by and for the PEOPLE. What we had, pre-Trump, was already not wonderful. We'll have to suffer through this and pick up the pieces, one by one. Reorient things so that PEOPLE are the priority again. And did I mention yet that the Orange Slug is a Russian Asset? Ya.
  • msf
    Tthe complaint hinged partly on CapOne advertising the old account as having one of the highest interest rates. Otherwise, it might have no more obligation to its customers to notify them of a better in-house account than it would have to notify them of a superior account at a competitor.
    The type of savings account at the center of the Capital One lawsuit was advertised to customers as having one of the “highest” interest rates in the nation, according to the CFPB.
    https://www.washingtonpost.com/business/2025/02/27/cfpb-drops-capital-one-lawsuit-other-cases-launched-under-biden/

    Banks know that checking/savings account money is sticky.
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