UPDATE:OCC Allows More Time For Comment On Capital One's HSBC Plan
November 21 2011 - 4:15PM
Dow Jones News
A U.S. federal bank regulator Monday announced it is giving the
public more time to weigh in on Capital One Financial Corp.'s (COF)
plans to buy HSBC Holdings PLC's (HBC, HSBA.LN, 0005.HK) credit
card business.
In a notice, the Office of the Comptroller of the Currency said
it will now accept public comments through Dec. 19. Initially, the
OCC closed the comment period on Oct. 21.
The OCC has yet to decide whether or not it will hold public
hearings on the proposal.
"That is something we'll consider after the comment period,"
said an OCC spokesman.
Earlier this month, a coalition of more than a dozen consumer,
housing and civil rights groups announced their opposition to
Capital One's planned acquisition and urged the OCC to extend the
comment period by two months.
"It would be a mistake for the regulators to rubber stamp
Capital One's acquisition of HSBC's credit card unit, given the
monoline and risky nature of their credit card business," said
National Community Reinvestment Coalition President John Taylor.
"This acquisition poses a threat to taxpayers, and raises serious
antitrust and systemic risk concerns."
The coalition also asked the OCC to hold formal hearings in five
major cities, to allow input from stakeholders in various regions
of the country. It also argued that the OCC should allow time to
review credit-card complaints from the Consumer Financial
Protection Bureau, a new consumer watchdog agency that recently
started gathering complaints from consumers.
"It's really significant that they are extending the comment
period," said a spokesman for the National Community Reinvestment
Coalition, which on Monday applauded the OCC's move. "It's very
rare for them to do that."
Capital One has steadily defended its proposal but it also
welcomed the extension.
"We appreciate the OCC providing an additional opportunity for
any interested parties to express their views," a Capital One
spokeswoman said in a statement. "Our history clearly demonstrates
that our customers and local communities will see numerous benefits
from this acquisition."
In addition to its plans to buy HSBC's credit card portfolio,
Capital One is planning to purchase ING Direct USA, the U.S.
online-banking business owned by ING Groep (ING, INGA.AE). The $9
billion ING deal, announced in June, would make Capital One the
fifth-largest bank in the nation, based on deposits.
While the OCC is considering Capital One's plans to acquire
HSBC's domestic credit card business, the Federal Reserve is in
charge of reviewing the ING deal.
Like the OCC, the Federal Reserve in August decided to give the
public more time to comment on Capital One's plans, a move that
came amid a chorus of complaints and questions. In addition, the
Fed held three meetings to collect more information on the bank's
proposal; the final hearing was held in San Francisco Oct. 5.
Opponents to the acquisitions criticize Capital One's focus on
credit cards, arguing that the bank's credit card lending practices
are so risky that the firm isn't worthy of an expansion.
Meanwhile, Capital One has promised to invest billions of
dollars in low and moderate-income communities and to add hundreds
of jobs in Delaware and South Dakota.
-By Maya Jackson Randall, Dow Jones Newswires; 202-862-6687;
maya.jackson-randall@dowjones.com
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