Media News

Capital One sues to stop Calif. credit card probe

LOS ANGELES (Reuters) - Capital One Financial Corp has sued in an effort to keep its records out of the hands of California Attorney General Jerry Brown, who is investigating whether the bank’s credit card business violated state false advertising and unfair competition laws.

In a proposed injunction, filed on Friday in San Francisco federal court, Capital One contends that as a national bank, only the U.S. Office of the Comptroller of the Currency can examine its records and enforce applicable laws.

Capital One COF.N converted its Virginia charter to that of a national banking association in March, about 18 months after Brown issued his first requests for information, the lawsuit said.

Capital One wants a judge to declare that because of its national charter, Brown can no longer investigate or sue it over its banking activities.

The attorney general requested “books and records ... and interviews with employees” on Nov. 13, 2006 and January of 2007, saying he had “substantial concerns about the credit card practices of Capital One,” the lawsuit said.

Brown specifically wanted to know about “solicitations for credit cards applications mentioning balance transfers, issues of credit cards on reaffirmation of preexisting debt and accounting closing practices,” the suit said.

The attorney general’s office renewed the request for information last week, even after the bank informed him of its revised charter, the lawsuit said.

The attorney general asked Capital One to sign an agreement that said, among other things, that it was being investigated for possible violations of the state’s unfair business practices and false advertising laws, as well as “other possible violations,” the suit said.

An attorney general’s office spokesman could not be reached for comment.

Reporting by Gina Keating, editing by Gerald E. McCormick