Capital One has reached a $425 million settlement to resolve allegations that it misled consumers enrolled in its 360 Savings rewards program. The original class-action suit claimed depositors were promised elevated interest rates that were later reduced without sufficient notice. Under terms of the agreement, qualified accountholders will receive cash payments or rate credits, while the bank has agreed to enhance its disclosure practices. This settlement follows intense scrutiny from state regulators and addresses potential restitution for over 1.3 million affected customers.

On Monday, a federal judge granted preliminary approval to Capital One’s amended $425 million class-action settlement, two months after rejecting the initial proposal due to concerns over notice distribution and fairness. New York Attorney General Letitia James praised the revised version for its improved communication plan, which includes direct mail and electronic notifications to account holders. A final hearing is scheduled for late spring, with distributions to begin shortly thereafter, pending court confirmation.

Capital One’s stock tumbled roughly 6.5% midday after President Trump announced plans to impose a one-year, 10% cap on all credit-card annual percentage rates. The proposal, set to take effect January 20, aims to address rising consumer costs but faces pushback from industry groups warning of tightened credit availability. According to Federal Reserve data, the average bank credit-card APR stood just under 21% in November 2025, highlighting the potential margin squeeze for issuers if the cap becomes law.

Analysts note that a 10% interest-rate ceiling could force Capital One to reprice its lending portfolio, particularly for borrowers with lower credit scores who currently face APRs well above the proposed limit. While some strategists view the sharp pullback as a buying opportunity—citing the bank’s $158 billion market capitalization and 1.04% dividend yield—others caution that implementation hurdles and regulatory uncertainty may result in prolonged volatility. Investors will be watching upcoming court dates on the settlement and any legislative developments on rate caps closely.