According to a census estimate, the median of the American household has a balance of $ 10,000 for the current deposit account and the normal deposit account. For the past few years, those who have stored this amount in a high -profits of a high -profits ordinary deposit account have earned nearly 4 % annual interest per year, that is, about $ 400 per year.
However, the interest rate of the average savings account is close to 0.4 %. And the three largest banks in the United States, Bank of America, Chase, and Wells Fargo provide 0.01 % in standard deposit accounts. This is a $ 10,000 deposit of $ 1 per year.
Banks make up for these miserable rates with benefits such as branches and ATMs, but they also know that many customers are not looking for better transactions from inertia.
At present, the Consumer Finance Protection Bureau has said that one bank, Capital One, intentionally causes confusion and does not know that customers switch to a higher wage account in the same bank. The difference between them with interest here is as follows.
The Consumer Bureau appealed for Capital One in mid -January, and the bank claimed to have misunderstood customers by creating a new high -yield account called 360 performance savings, and saved the existing account with lower interest rates at lower interest rates. I suffered. Banks used to advertise the account as “one of the most savings rates in Japan.”
The agency estimated that Capital One has avoided $ 2 billion by not automatically converting the 360 savings accounts into 360 performance savings accounts.
The bank said he did not agree to the characteristics of the Consumer Bureau's lawsuit, saying that he would disagree with court claims.
Just as the 360 -deposit account was compared to the same bank's new account, the minimum rate of reached so far was 0.3 %, about 30 times the name rate paid by most major banks.
These banks rarely pay less than 0.01 %. The truth of the Saving Law requires an interest rate to disclose interest rates at the closest decimal point, so it is not possible to list interest rates below 0.01 % without simply listing 0 %.
Banks know that customers are generally not paying attention to account details. A survey outsourced by Capital One has found that many people have checked a regular deposit account once a month, and about half of them do not know what they are doing.
Is it illegal to make a profit from customer carelessness? Or is it just a normal business that is a bank?
Christopher Peterson, a law professor at the University of Utah, worked at the Consumer Bureau in a previous case, but in the original 360 deposit account, like an advertisement with an account with the “highest savings rate”. He described the specific billing capital. Banks are responsible for damages. By 2023, the rate was lower than the national average.
One of the questions raised in this case is whether Capital One is obliged to continue to provide the “highest savings rate” in the future account. Bank ads did not mention future fees. However, in the 2010 Dod Dod Frank Law, “financial service providers can be responsible for the irrational advantage of not understanding the products provided by consumers.”
The Consumer Bureau has argued that banks have instructed branch employees not to volunteer to volunteer information about new accounts. The customer was able to switch accounts at any time at no charge, but the bank did not send e -mails on new accounts to existing customers until the agency started investigating.
Many customers are probably not comparing the federal preparation system and the fare for the ordinary deposit account. When the Federal Fund rate declined in 2020, Capital One's 360 savings were reduced. However, when interest rates began to rise again in 2022, 360 savings did not approach the competitive level again. (360 Performance Savings account has been significantly raised.)
This is the first case brought by the Consumer Bureau on the Biden administration's decline. Scott Pearson, a lawyer representing a bank on regulation issues, said that the institution has “exceeded their authority,” saying the capital.
Pearson pointed out that it is not expected to warn the customer every time the bank is eligible to refinance a mortgage. “There are many case laws that financial institutions say that they do not have a trustee obligation,” he said. “Who can get better transactions elsewhere, or who thinks to you that you can do better transactions to you, who thinks it's a bank's job, and why is it my? A kind of shocking and unprecedented theory.
At the moment, most of the largest banks are characterized by vague advertisements for saving for the future, providing very low interest rates. For example, CHASE encourages customers to sign up to a regular deposit account and “gain interest”, but the standard interest rate is 0.01 %.
In the past 10 years, an annual interest rate of 0.01 % has been gained only $ 10 compared to about $ 2,000 if the same money is consistently stored in a consistently competitive savings account. Ta.
It is not clear whether the legal theory of the Litigation by the Consumer Finance Protection Bureau will be tested. On Saturday, Rochito Chopra, the director of the agency, was fired by the Trump administration, and the new director was not aggressive when pursuing existing claims. Many Trump's allies were critically critical to stations, including Eron Mask, who declared CFPB on social media last year.
