Key facts
- A federal judge in Maryland dismissed a proposed class-action lawsuit against Capital One.
- The lawsuit alleged Capital One charged excessive interest rates on credit cards.
- The judge rejected claims that federal law limited Capital One's rates to Virginia's 6% maximum.
- Capital One is also facing a separate class-action settlement regarding savings account interest rates.
A federal judge in Maryland has dismissed a proposed class-action lawsuit that accused Capital One of charging excessive interest rates on its credit cards. U.S. District Judge Theodore Chuang rejected the plaintiff's argument that federal law prohibited Capital One from charging an annual interest rate higher than the 6% maximum allowed in Virginia, the company's home state.
Separately, Capital One is involved in a proposed $425 million settlement for a class-action lawsuit concerning its 360 Savings accounts. This lawsuit, filed in 2024, alleged that Capital One froze savings account rates for years, preventing customers from earning billions in interest payments, despite rising national rates. The Consumer Financial Protection Bureau (CFPB) had also sued Capital One for similar reasons, alleging misleading marketing of its savings accounts. New York Attorney General Letitia James and a coalition of 17 other attorneys general have opposed the $425 million settlement, arguing it would "shortchange" customers and fail to hold Capital One accountable for allegedly cheating them out of over $2 billion in unpaid interest.