National Groups Call for Public Hearings and Extended Comment Period on Capital One Proposed Acquisition of ING Direct

Washington, DC — The undersigned national consumer, community, housing and civil rights organizations today made this statement regarding Capital One’s proposal to purchase ING Direct:

“We strongly support extending the comment period on the acquisition by at least 60 days and holding public hearings in at least 5 major cities which will cover the impact of the proposed merger on consumers, communities and the American economy. Specifically, we are calling for a thorough investigation of the practices of both entities and if those practices will be continued, reformed or exacerbated by the proposed purchase. The American people also deserve a thorough review of the potential impact of this purchase to ensure that the process instills confidence in the U.S. financial system by consumers, investors and institutions around the world, and will not dampen prospects for a strong economic recovery.

Specifically, there are five major areas which require much more significant regulatory oversight and thorough investigation:

The potential impact on our national financial stability:
Consolidation in the financial sector should demonstrate a significant public benefit. Capital One’s public benefit statement in their acquisition application runs one paragraph long, and does not demonstrate a clearly significant benefit to society. Too-Big-To-Fail is too big an issue to rely on one paragraph.

Federal Reserve Board Governor Daniel Tarullo set this standard for the growth of firms like Capital One:
“The regulatory structure for SIFIs [Systemically Important Financial Institutions] should discourage systemically consequential growth or mergers unless the benefits to society are clearly significant.” [emphasis added]

Does this proposed acquisition comply with new demands for transparency and oversight?
With the passage of Dodd-Frank, new, overlapping and shifting regulatory responsibilities require rigorous consideration of the acquisition by the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the Federal Reserve and the Financial Stability Oversight Council. In particular, the Financial Stability Oversight Council (FSOC) should review this acquisition to assure the general public that it is functioning as advertised and that it is taking seriously prudential concerns about establishing another “too-big-to-fail” bank. Under Dodd-Frank, FSOC has the power to hold hearings and a comment period; it should do so.

Have current legal challenges all been resolved?
Capital One is under investigation by the U.S. Department of Housing and Urban Development, over a complaint filed by the National Community Reinvestment Coalition (NCRC) alleging racially discriminatory lending practices that violate fair lending laws. It has also failed to live up to the commitment made by Chevy Chase, which it acquired, under a settlement with the U.S. Department of Justice.

Is the spirit and the letter of the Community Reinvestment Act being respected in the process?
Creating the fifth largest bank in the United States and only allowing 30 days to comment is not an adequate and proportionate process considering the significant impact of the merger on consumers, communities and the economy. Approval of the acquisition should not happen without a clear commitment from the bank of its intentions to serve working class Americans. This commitment should be made clear prior to application approval, not after.

Past allegations of abusive financial practices need to be addressed and resolved
Due to allegations of abusive and predatory credit practices, the Federal Reserve should allow time to gather potential consumer credit card complaints from the Consumer Financial Protection Bureau, which recently launched its complaint gathering mechanism.

To provide adequate time and allow thorough and adequate input from community leaders, businesses and other regulatory agencies, the Federal Reserve should immediately:

•    Extend the public comment period by at least 60 days.
•    Hold public hearings in at least five major cities, such as New York, Chicago, Los Angeles, Washington, D.C. and Atlanta.


Alliance for a Just Society
Americans for Financial Reform
Center for Responsible Lending
Gamaliel Foundation
Greenlining Institute
Housing Assistance Council
National Alliance of Community Economic Development Associations (NACEDA)
National Community Reinvestment Coalition
National Consumer Law Center (on behalf of its clients)
National People’s Action
National Low Income Housing Coalition
National Urban League
PICO National Network
Public Citizen
Rainbow PUSH Coalition
SAFER, the Committee of Economists and Other Experts for Financial Reform sponsored by the Political Economy Research Institute at the University of Massachusetts/Amherst

About the National Community Reinvestment Coalition (NCRC):
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America’s working families.  


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