Federal Reserve considers Capital One-ING Direct merger

The Capital One headquarters is shown in Mclean, Va. The Federal Reserve is considering a merger between Capital One and ING Direct USA.

EDITOR'S NOTE:This story did not seek comment from Capital One on allegations that its merger with ING Bank would create a risk to the financial system. Capital One responded, “The reality is that credit cards only account for 25 percent of Capital One’s assets.  We are now and we will remain a traditional bank with fully diversified products and sources of funding. Neither Capital One nor ING Direct engage in any of the activities that precipitated the financial crisis.  Even after the acquisition, we will have none of the complexity and interconnectedness that the Dodd-Frank Act sought to address in ending ‘too big to fail.’” The Federal Reserve Bank's decision on the merger has been delayed until Monday, Feb. 13.

Jeremy Hobson:Today the Federal Reserve will vote on a big bank merger. Capital One wants to link up with the Internet Bank ING Direct USA in a $9 billion deal.

But as Marketplace's Jeff Tyler reports, there are concerns about the combined company being just too big.


Jeff Tyler: Capital One may be best known for its Viking commercials.

Capital One Ad: What’s in your wallet?

The deal would make Capital One the nation’s fifth largest credit card lender. Jesse Van Tol is spokesman for the National Community Reinvestment Coalition, a group of consumer and civil rights organizations opposed to the deal. He says Capital One is less diversified than its competitors, with roughly 75 percent of its profits coming from credit cards.

Jesse Van Tol: Capital One is more likely to fail than some of its competitors because of the nature of its very risky credit card business.

Others say the Federal Reserve needs to complete the Wall Street reforms it’s started. Chris Cole is with the Independent Community Bankers of America.

Chris Cole: They need to finalize all the Dodd-Frank regulation and be able to evaluate the full systemic risk of all these large banks before they begin creating new ones.

If the Capital One deal goes forward, opponents say taxpayers could be on the hook for another bank considered too big to fail.

I’m Jeff Tyler for Marketplace.

About the author

Jeff Tyler is a reporter for Marketplace’s Los Angeles bureau, where he reports on issues related to immigration and Latin America.

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