A lawsuit has been filed by customers of CapitalOne Bank alleging that the bank engaged in deceptive tactics with its 360 Savings customer base in 2022 and 2023. The plaintiffs assert that when CapitalOne began offering the 360 Performance Savings account as interest rates began increasing in 2022 and then into 2023, it did not notify its existing customers that a higher rate from a similar sounding product was available. Full details of the lawsuit are available on Yahoo! here.
The lawsuit may be of interest to any customer who lost significant amounts of interest by failing to switch from a 360 Savings account to a 360 Performance Savings account in 2022 when the latter began being offered, as the Plaintiffs attorneys are presumably intending to obtain the complete list of account holders and then seek class action status.
However, as a former attorney, I would suggest that those customers not to get too excited about their prospects for any recovery.
As the Yahoo! article points out, offering a higher rate to one customer than to another is engaged in frequently, and has been also been a practice of BrioDirect and UFB Direct. Popular Direct, Vio Bank and VirtualBank are other online banks that have engaged in this process over the 2022 - 2023 time period. Salem Five Bank has engaged in this practice for years. To boot, many banks, including Capital One, will extend better rates to their online customers than they do to branch customers. Bank can offer higher (or lower) rates to customers who are members of an affinity organization (like AARP), or to those buying brokered products (like those customers purchasing a brokered CD or arriving through a deposit consolidators like Raisin. In short, banks have the right to segment their markets and do not need to offer all customers the same rate. It may not be good business, but it is well within their legal rights.
Since this case is not going to be successful on the basis of a contractual obligation (i.e., a violation of the terms and conditions), it is going to need to depend on some sort of affirmative and active intent on the part of CapitalOne to deceive its customers. Stranger things have happened in courts and in the process of discovery, but it seems like a difficult burden for the plaintiffs to meet. Statements were made available to customers online and by mail monthly that fully disclosed the rate and the interest earned. Even a cursory review should have made clear to customers that they were not earning the 3% or 4% Performance rate. The product is also differentiated by the use of the word Performance.
The law does not guarantee you the right to earn the highest savings or money market rate that is available, even from a bank that you may feel good about and may have been working with for decades. Rather, you need to constantly review your statements are be aware of the interest rates that you are earning in all of your accounts. Fortunately, it is easy to check sites like BestCashCow - and competing sites like RatesAndInfo.com - to be sure that you are getting the most competitive savings and money market rates in the market.
The climate crisis is continuing, even while other global crises and risks capture all of the media's attention. It is just as incumbent today as it was two months ago that banks fund wind and solar projects in order to expedite the economy's transition from carbon dependency.
Therefore, we at BestCashCow took note of a recent financial extended by Forbright Bank, one of our advertisers, to Renew Projects, LLC, a small business based out of Herndon, Virginia, that until recently focused exclusively on manufacturing energy efficient LED lighting.
Under the terms of the financing, Forbright Bank is providing a $450,000 Power Purchase Agreement to help Renew Projects build out a 206.1KW rooftop solar installation. Renew Projects is using the solar installation to satisfy its own product demand and may sell additional output in the grid.
Courtesy: Forbright Bank
"The need to build a low-carbon economy is increasingly urgent," said John Delaney, Founder and Executive Chairman of Forbright Bank. "We're committed to helping businesses finance the transition to cleaner sources of energy and lower-carbon operations. This imperative to decarbonize is the single largest investment opportunity of our lifetime, and we're proud to be a bank leading these efforts."
Deals like Forbright's Renew Projects deal, and Forbright's earlier financings of wind turbine repairs, solar and waste remediation deals are very encouraging. Forbright's complete climate policy is outlined here. We would desperately like to see other US financial institutions outline a climate policy and finance projects that speed the transition to a low-carbon economy, as Forbright is doing.
As Forbright takes aggressive action to create a template for how banks should be addressing the climate crisis, BestCashCow has chosen to name it as the first bank in the US to receive our Sustainable Bank badge.
The Federal Reserve Open Markets Committee has concluded its October 31 - November 1 meeting, and it voted unanimously to hold interest rate unchanged at 5.25% to 5.50%.
The Fed's statement indicates that, while this is its second consecutive pause, the Fed is still determining the extent to which additional policy firming may be necessary. While job gains have moderated and tightening financial conditions (through higher long-term Treasury rates) have cooled off the economy, inflationary pressures remain elevated. Powell and his team vow to remain vigilant in their fight against inflation until they are confident that inflation is well on its way to the Fed's long-term 2% target.
This bias towards additional hikes is basically unchanged from its last meeting. The bias itself keeps markets on edge and contributes to ensuring that the market's expectations are that the Fed will keep rates higher for much longer.
Yet, if global markets continue to forecast a weakening economy in early 2024, the Fed can leave the door open to make additional Fed funds rate increases for a while, but it may be done for this cycle.
