Consumer advocacy groups and Rev. Jesse Jackson criticized Capital One
Financial's business model at a hearing the Federal Reserve held in Chicago to
allow the public a chance to comment on Capital One's planned acquisition of ING
Direct USA. Jackson said the bank's credit card business is so risky it would
pose a threat to the U.S. financial system. Despite Capital One's vows to hire
new workers and invest in underserved communities, the civil rights icon said
the bank markets expensive credit cards to vulnerable borrowers. The $9 billion
deal would make the bank the fifth-largest in the nation based on deposits.
Capital One's general counsel, John Finneran, denied that the bank is too
entrenched in the credit card business, claiming that it paired down its cards
beginning in 2005. Still, consumer interest groups such as the National
Community Reinvestment Coalition oppose the deal, claiming the bank has a poor
track record of unsavory lending.
Web Link - May Require Free Registration