en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en
There’s Some Orange in Your Pocket – Capital One Gains Approval to Acquire ING Direct USA
Published or updated March 30, 2013 by Glen Craig
This story didn’t make front page headlines in the financial media but behind the scenes, a battle took place with Capital One emerging as the winner.
Capital One, well known for their “what’s in your wallet” commercials agreed to purchase ING Direct USA for $9 billion paving the way for Capital One to become the 5th largest bank in the United States based on total deposits.
This acquisition faced tougher than expected scrutiny by Federal Regulators although they recently approved the deal.
By banking standards, this was not a large deal so why did it face such tough headwinds?
Their advertising campaigns may be witty and clever but don’t mistake that for a company that isn’t a big player in the banking market.
Capital One has found a niche in the subprime credit card market.
With more than one third of their credit card portfolio subprime customers, some have seen this company as a small player who has contributed to the nation’s credit crisis by lending to customers who shouldn’t have qualified for a credit card.
Although they weren’t one of the top 10 largest banks, a string of acquisitions has changed that as Capitol One has not only purchased ING Direct USA, but also three other mid sized companies over the past few years raising the eyebrows of regulators and other interest groups that believe its $320 billion size puts it in the “too big to fail” category along with the nation’s four largest banks.
Bear in mind that Capital One is also waiting on approval to acquire HSBC’s American credit card business to add to their growing company.
Is that True? Would they be “too big to fail?”
The Fed approved Cap One’s purchase of ING Direct. What do you think of it?
The Federal Reserve didn’t agree.
After an extensive review along with a longer than usual public comment period, they concluded that Capital One operates differently than its four larger competitors.
First, the Fed concluded that the bank would be easy to unwind and sell off if they found themselves in the same type of situation as firms that were purchased in 2008 and 2009.
Next, Capital One and ING DIRECT don’t participate in the investment banking activities that the larger banks have been criticized for in the past.  This, according to regulators, makes Capital One less vulnerable to downturns in the investment markets.
As Capital One said in their defense of the deal, they deal in mom and pop banking activities instead of complicated derivatives and other activities.
Finally, even as the 5th largest bank, they are still significantly smaller than the top four banks.  Capital One may have more than $300 billion in deposits but the larger banks have trillions in assets.
As part of the approved deal, Capital One has agreed to make a larger commitment to more community based banking activities including a 10-year, $180 billion commitment to investment and lending in local small businesses and other community based practices.  They also unveiled a plan to add 500 jobs in Delaware, ING Direct USA’s headquarters.
In a press release, they said that by adding ING’s portfolio of products they could expand their product offerings to reach a larger number of people.
The Federal Reserve issued a 40 page ruling explaining the methodology behind their ruling as well as their commitment to scrutinize all bank mergers in order to protect against creating “too big to fail” institutions and that Capital One is a not a systemic risk to the nation’s economy.
What do you think?  Is it wise for the Fed to let Capital One acquire ING Direct USA?
other takes on the acquisition:
Federal Reserve Approves Capital One’s Acquisition of ING Direct
Update 2: Fed Approves Capital One Acquisition of ING Direct – MyBankTracker.com
Glen Craig is married and the father to four children that he spends the day chasing as a stay-at-home-dad. He took an interest in personal finance when he realized most of his paycheck was going toward credit card bills. Since then he's eliminated his credit card debt and started on a journey towards financial freedom.
Jenna, Adaptu Community Manager says
February 17, 2012 at 3:44 pm
I’m not sure if taking 5th place really makes them too big to fail…
February 19, 2012 at 7:45 pm
Even at 5th place they are still a lot smaller than the four above them.
I think people get worried these days when they see big banks merge. We don’t want to see mergers that end up getting bailed out. I have no problem the the Fed putting in some due diligence before an approval.
The Happy Rock says
February 17, 2012 at 5:15 pm
One of the most hated banking companies acquires my favorite banking company……I just hope they don’t ruin ING Direct. I’ll be a sad rock who will change banks.
February 19, 2012 at 7:46 pm
IT would be a shame if they were bought just for the assets and not for the culture ING cultivated.
February 21, 2012 at 9:22 am
I agree. I use ING for all of my banking and have been watching closely for any changes to my accounts. I hope ING stays the same as I love it, but I won’t hesitate to jump ship if Capital One makes drastic changes.
February 19, 2012 at 2:04 pm
This makes me a little sad. I am with ING – it’s ING Canada so doesn’t apply here – but I think it’s such a great bank, one of the banks that doesn’t suck (and probably the only one that doesn’t charge fees). It has the best customer service and it’s so personable. I love their investment options and just love them as a bank. I can totally see ING being ruined by Capital One.. I’m glad ING Canada hasn’t been bought out yet, but I’m sure one day it will happen.
February 19, 2012 at 7:43 pm
Well, the ING USA sale had to do with European bailouts so you may not have to worry about the Canadian version.
I hope Cap One uses this as a way to improve their brand by following the example ING Direct has set up all these years. Time will tell.
A Little About Me
I'm Glen Craig - I used to live paycheck-to-paycheck, drowning in credit card debt. I turned that all around and now I build wealth rather than debt.
My goal is to make personal finance easy for you.
Join our email list (FREE) and never miss an article!
Use Google Calendar To Pay Your Bills On Time
9 Things to Do When You Retire
Side Hustle-Make Extra Money Cleaning Homes
Four Ways You Can Pay Off Your Home Mortgage Faster
Don’t Forget Your 401(k) When You Leave Your Job! Here’s What You Can Do With It
Your 4 Step Guide on How to Stop Living Paycheck to Paycheck
What Is A Mortgage Escrow Account?
This is Why Your House Isn’t Selling – Here’s How to Finally Get Your House Sold
7 Ways to Get Rich Quick
What is Renter’s Insurance and Why You Need It
What Is a Probate Lawyer and When Would You Use One?
Money Market Account VS Savings Account – What’s the Difference?
Five Ways Fantasy Baseball is Like Personal Finance
Tools to Help Organize Your Taxes
Don't Let Your Goals Fizzle Out! - 5 Reasons Goals Fail, and What You Can Do To Make Yours Succeed
What Do You Think of New Year's Resolutions?
Tools to Improve Your Finances
Online High Yield Savings
All About Online Checking Accounts – Why Pay More Fees Than You Have To
Personal Capital Review - A One Stop Financial Center
Online Brokerages That Won't Break Your Bank
Credit Karma Review - Get Your Credit Score and More
Mortgage and Refinance Rates
Follow Us On Pinterest!
Follow Free From Broke's board Most RePinned and Popular {Free From Broke} on Pinterest.
Think Long Term When Shopping Black Friday and Cyber Monday
10 Essential Tips For Shopping Black Friday And Cyber Monday That Will Save You Money
How to Improve Your Credit Score Fast
What is a Refund Anticipation Loan (RAL) and is it Worth It?
Paying Taxes with a Credit Card: Pros and Cons
Free From Broke is for general information or entertainment purposes only and does not constitute professional financial advice. Be smart and do your own research or contact an independent financial professional for advice regarding your specific situation.
In accordance with FTC guidelines, we state that we have a financial relationship with companies mentioned in this website. This may include receiving access to free products and services for product and service reviews and giveaways.
© 2007–2022 Free From Broke A Personal Finance Blog For Regular Folks – All rights reserved.
No content on this site may be reused in any fashion without written permission from FreeFromBroke.com | Privacy Policy | Sitemap
Copyright © 2022 · Metro Pro on Genesis Framework · WordPress · Log in
We are using cookies to give you the best experience on our website.
You can find out more about which cookies we are using or switch them off in settings.
Go to mobile version
Close GDPR Cookie Settings
Powered by  GDPR Cookie Compliance
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
Enable or Disable Cookies
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.