In spite of reported concerns that Capital One’s proposed purchase of ING Direct would create yet another bank that was too big too fail, the Federal Reserve announced yesterday that it has signed off on the $9 billion deal.
The merger of the two banks, which Cap One now says it expects to complete within the coming days, would form the fifth-largest bank in the U.S. in terms of deposits. In spite of this increase in size, the Fed ruled that Capital One’s business and investments are not complex enough “to a degree that would pose significant risk to other institutions.”
Thus, in a unanimous 5-0 vote, the five Fed governors “concluded that consummation of the proposal can reasonably be expected to produce public benefits that would outweigh any likely adverse effects.”
The Capitol One/ING deal is the largest bank merger to come before the Fed since the passing of the Dodd-Frank financial reforms that sought to prevent the virtually unrestrained expansion of financial institutions that had marked the last quarter century.
When the sale was first announced last summer, Capital One tried to quell concerns from ING customers that the online bank they’d come to know and love would quickly be taken over by dirty vikings or barbarians.
At the time, Cap One said it had “no plans to make any significant changes. ING customers should expect the same great customer experience and the ‘status quo’ from ING for the foreseeable future.”
Now is the time for Capital One to make good on that statement, especially with the Worst Company in America tournament coming up.