Capital One’s board received a preliminary approval from a federal judge on January 12, 2026, for a $425 million settlement that resolves a class‑action lawsuit alleging the bank misled depositors about the rates on its 360 Savings accounts.
The settlement requires Capital One to pay $425 million in cash and to match the interest rates on its 360 Savings and 360 Performance Savings accounts. The agreement is estimated to cost the company an additional $530 million in future interest expenses, a significant hit to its balance sheet and future profitability.
The lawsuit centered on a two‑tiered savings account structure that offered higher rates on 360 Performance Savings while marketing 360 Savings as a high‑yield product. State attorneys general, led by New York’s Letitia James, played a key role in securing the revised terms, and the settlement follows a prior agreement that the judge rejected for being too low for depositors.
Investors reacted negatively to the settlement announcement, citing both the direct cash outlay and the looming threat of a proposed 10 % cap on credit‑card interest rates that would hit Capital One’s core revenue stream, which accounted for 76 % of its Q3 2025 revenue.
Capital One has not yet issued a statement on the settlement’s impact on its financials, but the bank’s credit‑card segment remains a critical source of earnings. The settlement and potential regulatory changes underscore the company’s exposure to consumer‑finance regulation and may influence its future pricing and product strategy.
Capital One’s pending acquisition of Discover Financial Services adds another layer of strategic complexity, as the company must balance the costs of the settlement with the integration and financing of the deal.
The settlement’s approval marks a significant legal milestone for Capital One, but the broader regulatory environment and the company’s heavy reliance on credit‑card revenue suggest that investors will closely monitor how the bank navigates these challenges moving forward.
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.