Breakdown of the $425 Million Deal
Under the now-rejected agreement, Capital One had agreed to pay $425 million, split between two pools:
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$300 million to compensate for lost interest based on what customers would have earned under the 360 Performance Savings rate, and
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$125 million for those who still hold 360 Savings accounts.
But the forward-looking relief was deemed woefully inadequate. Judge Novak noted that even with the added interest pool, the estimated 4 to 5 million account holders would earn roughly 0.8% interest for just 16 months—a rate one-fourth or even one-eighth of the promised “high-interest” Performance accounts.
State Attorneys General Push Back
The proposed settlement faced fierce opposition from 18 state attorneys general, representing nearly half of the U.S. population. Leading the charge was New York Attorney General Letitia James, who accused Capital One of bait-and-switch tactics—enticing customers with high-interest savings promises only to deliver subpar returns.
The coalition of attorneys general urged the court to strike down the deal, arguing it “fails to adequately redress the harms” and even saves Capital One money by masking the true value of restitution with inflated settlement figures.
Judge Novak credited their involvement heavily, calling their opposition “substantial,” despite fewer than 20 individual objectors and under 100 opt-outs from the class.
