Capital One Scrutiny Is Eased
Capital One Financial Corp. said yesterday that regulators have ended an agreement under which the company's internal controls were scrutinized by federal and state regulators.</br></br>The "memorandum of understanding" had been in place at the McLean- based issuer of credit cards since July 2002. It meant that the Office of Thrift Supervision and other regulators were taking a hard look at whether the firm had insufficiently guarded against financial and other risks during its rapid expansion over the past decade.</br></br>Under the 2002 agreement, the company was made to classify sub- prime loans -- those with high credit risk -- more conservatively and spend heavily on technology infrastructure, internal audits and contingency planning.</br></br>"We're back to normal conversations and interactions with our regulators," said Tatiana Stead, a Capital One spokeswoman, referring to the OTS, Federal Reserve Bank of Richmond and Virginia Bureau of Financial Institutions.</br></br>The day after the company announced the agreement, the price of its shares, which had been trading at more than $50, plummeted 40 percent, prompting worries among analysts that the additional regulation could crimp Capital One's growth. Since then, its share price has rocketed back up, closing at $69.60 yesterday.