WASHINGTON (Reuters) - The Federal Reserve announced on Friday that it will hold three public meetings on the proposed purchase of ING Groep NV’s online bank ING Direct by Capital One Financial Corp.
The hearings will be held in September and October in Washington, Chicago and San Francisco.
The Fed also announced that it will extend the public comment period on the deal through October 12.
The Fed said the hearings will help it determine if the deal will “produce benefits to the public” that “outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices, and risk to the stability of the U.S. banking or financial system.”
Capital One agreed in June to buy ING Direct from the Dutch banking and insurance group for $9 billion in stock and cash. ING had to sell the business, one of the jewels of its retail banking franchise, as part of a deal with the European Commission following its October 2008 Dutch government bailout.
Capital One said in a statement on Friday that it respects the board’s decision to hold hearings and looks forward to “telling our story.”
Some consumer groups and members of Congress have called on the Fed to further scrutinize the deal.
Earlier this month, Representative Barney Frank, the top Democrat on the House Financial Services Committee, wrote the Fed asking that hearings be held and the comment period extended.
“This proposed purchase would create the fifth-largest bank in the United States,” Frank wrote. “For this reason alone, care should be taken to thoroughly examine the impact.”
Consumer groups have questioned the deal, arguing it would create the type of “too big to fail” bank that the 2010 Dodd-Frank financial oversight law is suppose to discourage.
They also have taken aim at Capital One, arguing the bank does not provide enough home loans to low-income communities and has “predatory” credit card practices.
“We have serious concerns about the impact of the deal on consumers, communities and the economy,” National Community Reinvestment Coalition President John Taylor said in an August 17 release. “Why rush to create another Too-Big-to-Fail bank?”
Capital One has pushed back against complaints, arguing the new entity would have a little more than $300 billion in assets, far less than the biggest U.S. banks.
“In each of our prior bank acquisitions, we have substantially increased our investments that serve lower income communities, providing $2.2 billion over and above those predecessor banks in their footprints,” the bank said in a statement on Friday. “Furthermore, we are actually adding thousands of jobs to (the) economy at a time when many financial services companies are announcing sizable reductions.”
Reporting by Dave Clarke, Editing by Carol Bishopric and Tim Dobbyn