Fed Approves Sale Of ING Direct To Capital One

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.

Comments

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  1. Altman says:

    You know, I have had a Capital One credit card forever, and I really like them. They have great customer service compared to other companies I’ve worked with like Chase or Barclay’s, and I like and respect that they are “conservative” with respect to credit limits and giving out new credit cards.

  2. Evil_Otto would rather pay taxes than make someone else rich says:

    “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.””

    Right. Give it a few months.

    /pissed off ING customer

    • Wowbagger the Infinitely Prolonged says:

      Ditto. But, at least we have a few months to research alternatives. I’ve heard Ally is pretty good.

      • CharlesFarley says:

        Ally is a bailout bank….

        they were born of GMAC.

        • lawnmowerdeth says:

          Sadly proving the name change worked.

          • Kavatar says:

            Why is that sad? At the time of the name change, GMAC was pretty much completely separate from GM. If you’re related in name only, and that name recognition becomes a liability rather than a benefit, change it.

            • ExtraCelestial says:

              I don’t understand your comment. People have issues with GMAC because of their role in the subprime lending fiasco and subsequent bailout despite having been a catalyst. I think a General Motors association is the absolute smallest of their black marks.

      • Derigiberble says:

        I’ve switched over to Ally after all the ING mess started and I’m rather happy with them. The rates are good, the interface is easy to use, and the transfers go through right when they say they will.

  3. nbs2 says:

    What, exactly, is Obama’s election strategy? “Yeah, there is no difference between me and my opponent, but I’m better at basketball.”

    • DjDynasty says:

      His Opponents don’t have multiple marriages, either because their a nut job (Newt) or because their religion allows it. My personal favorite is Romney’s parents are mexican.

    • ninjustin says:

      I think Obama’s strategy is to let his opponents tear themselves apart then. Laugh at the fools they’ve made out of themselves.

      • exit322 says:

        I think Obama’s strategy is the Bush 2004 strategy.

        “OK, I’m not all that great, and in 10 years few will look at my era fondly, but look at the idiot I’m running against.”

    • dolemite says:

      I’d go with “Well, we were supposed to have a Great Depression 2, and that didn’t happen. Unemployment didn’t skyrocket. The auto companies we bailed out are doing great now. We pulled out of Iraq. We passed some measure of healthcare reform that put millions of Americans on insurance. The market was at 6k when I came into office and now it’s almost 13k. Unemployment is coming down.”

      His opponents? “We really want to lower taxes on the rich. I mean…we know their wealth has increased 300% in the same period the middle class’ wealth has increased only 40%, but man, we need to cut those guys a break.”

  4. PhiTauBill says:

    Ugh… somehow I don’t think that Capital One will be largely leaving them alone akin to Amazon’s treatment of Zappos…

  5. Loias supports harsher punishments against corporations says:

    What benefits, exactly, does a customer get when two banks absorb each other?

  6. MonkeyMonk says:

    With the current developments in the economy Obama’s strategy should be to run on his successful record. There’s a lot of people who might not agree with that but they were never going to vote for him in the first place.

    That said, he really needs to get serious in his next term about whipping Congress into shape to reduce the deficit — and the only solution is going to be one that reduces spending AND raises taxes.

  7. Bodger says:

    In corporate speak “for the foreseeable future” means until the ink is dry and then all bets are off.

  8. bitslammer says:

    Already pulled all my money out. USAA FTW!

    • Jerry Vandesic says:

      I would do the same but USAA’s interest rate is pretty bad. Given the premium service USAA provides in all other areas, this is a real surprise to me.

  9. SPOON - now with Forkin attitude says:

    In other news, there are several openings on cap1′s board of obscene profits that are now available to members of the fed reserve

  10. crispyduck13 says:

    Fine, but no givesies backsies*.

    *Bailouts.

  11. Lyn Torden says:

    Cap One is already too big. In terms of the number of banks that are already too big, this doesn’t increase that number. However, it does increase the level of damage that will happen when Cap One finally does fall.

  12. rockelscorcho says:

    I knew things were looking too good for ING. Capital One will screw this up, you can’t change their nature of fucking up.

  13. rockelscorcho says:

    I’m sure they are having a meeting right now, and here is how it goes:

    “Okay everyone, we’ve just made it official…ING Direct is ours!”
    “Alright!!!!”
    “Ok, now, I know you have heard the stories regarding the fact that ING Direct was awesome, and everyone enjoyed their services. We would like to maintain that… However, we’re Capital One! We do things different here, I mean, you all know that from the recruitment video! But, I feel, we do need to fuck this up somehow. Clearly, we could leave a wonderful idea alone and just keep the status quo! It worked for ING after all! But, we lack innovation! We lack vision! So, in the tradition of Capital One, let’s move forward in ruining this idea! Our plan then will be to lose thousands of accounts! After which, a new bank will open, which resembles ING, for those accounts to go to. Then, after 10 years, we can acquire that said bank! Okay, people, let’s start fucking things up! And don’t forget, Friday is Hawaii shirt day! Wee!”

  14. eturowski says:

    I’m just wondering how far the interest rate on my savings account will drop as a result of this (already down to 0.80% APY, thanks to the Fed!).

    • whogots is "not computer knowledgeable" says:

      Not just the Fed — those rates started dropping long before 2007. Hell, I wrote them a breakup letter when they got down to 3.25%, then decided I still had a use for the account even without a decent interest rate. 3.25%! Can you even imagine earning that on a savings account?

  15. vdestro says:

    Not sure of an alternative. Guess I’ll just move everything into my credit union savings account for now. Interest rate is measured in tenths of a percent but it’s better than being part of a mega bank.

  16. HeatherLynn30 says:

    I recently joined ING and I love them. But this? No. Absolutely not. I’ve found a local credit union I’m joining this weekend.

  17. MikeVx says:

    Ah, so the sale only just actually happened.This explains the lack of deterioration at ING for the last several months. As I said previously, I’ll wait until thy actually screw something up before bailing, but I’ll be very surprised if I still have an account there in a years time.

    As a former Crapital None victim, I have no faith whatsoever in their ability to do things right.

    I’d best be looking for a replacement, then. Anyone know a place with interest rates that haven’t sunk below pathetic? I don’t really feel like waiting until ING can re-open in the US.

    • TexasP says:

      Yes, General Electric stock. The current dividend yield is 3.62%, and that is very low by pre-Great-Recession standards.

  18. working class Zer0 says:

    ” 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.”

    And the Fed has never been wrong!

  19. flychinook says:

    So… If I have money in an ING Direct account, and have a delinquent account with Capitol One… Can they take the money out of the ING account to pay towards the other, without my permission?

    • BigErn says:

      Why don’t you NOT have a delinquent account and then you don’t have to worry? Geesh, is that a real question?