In These Times
09-29-2011, 11:27 PM
WASHINGTON, D.C.—After protests from labor and community activists, the Federal Reserve announced in late August that it would extend the public commen (http://www.washingtonpost.com/business/capitalbusiness/fed-extends-comment-period-on-cap-one-ing-direct-deal/2011/08/26/gIQAWZMrgJ_story.html)t period by 51 days on the proposed merger between Capital One and the online bank ING Direct, which would create the fifth largest bank in America. The Fed also announced that it would hold three public hearings on the deal around the country; activists hope to use these hearings to show that Capital One is a bad bank that should not be allowed to get bigger.
“Capital One’s model of business is to basically turn people upside and shake them,” says John Taylor, president & CEO of the National Community and Reinvestment Coalition and Reinvestment Coalition, who is helping lead a coalition of more than 200 community, faith and labor groups opposed to the merger. “We shouldn’t reward them by letting them expand more to become a megabank that we will be forced to bailout once again.”
Capital One received $3.5 billion in bailout funds (http://www.ncrc.org/component/k2/item/638-capital-one-/-ing-direct-acquisition), yet it has refused to lend to qualified low-income borrowers, requiring them to show credit scores that are higher than the minimum qualifying scores mandated (http://dealbook.nytimes.com/2011/08/23/in-feds-move-on-capital-one-deal-a-test-of-dodd-frank/) by the Federal Housing Administration. Taylor says the bank has systematically refused to lend to people of color and that it encourages small business to use high interest credit cards instead of giving such small businesses loans.
Public backlash voiced at the hearings could cause the proposed merger to fall apart, as Capital One is already on shaky financial footing. Moody has placed Capital One on warning for a credit downgrade earlier this year (http://www.reuters.com/article/2011/06/17/markets-ratings-capitalonefinancial-idUSWNA128520110617). To make the merger happen, the company is now promising it will create jobs—and marshaling its Democratic allies.
More... (http://www.inthesetimes.com/working/entry/12027/bailed-out_capital_one_marshals_democratic_allies_to_push_merger_deal/)
“Capital One’s model of business is to basically turn people upside and shake them,” says John Taylor, president & CEO of the National Community and Reinvestment Coalition and Reinvestment Coalition, who is helping lead a coalition of more than 200 community, faith and labor groups opposed to the merger. “We shouldn’t reward them by letting them expand more to become a megabank that we will be forced to bailout once again.”
Capital One received $3.5 billion in bailout funds (http://www.ncrc.org/component/k2/item/638-capital-one-/-ing-direct-acquisition), yet it has refused to lend to qualified low-income borrowers, requiring them to show credit scores that are higher than the minimum qualifying scores mandated (http://dealbook.nytimes.com/2011/08/23/in-feds-move-on-capital-one-deal-a-test-of-dodd-frank/) by the Federal Housing Administration. Taylor says the bank has systematically refused to lend to people of color and that it encourages small business to use high interest credit cards instead of giving such small businesses loans.
Public backlash voiced at the hearings could cause the proposed merger to fall apart, as Capital One is already on shaky financial footing. Moody has placed Capital One on warning for a credit downgrade earlier this year (http://www.reuters.com/article/2011/06/17/markets-ratings-capitalonefinancial-idUSWNA128520110617). To make the merger happen, the company is now promising it will create jobs—and marshaling its Democratic allies.
More... (http://www.inthesetimes.com/working/entry/12027/bailed-out_capital_one_marshals_democratic_allies_to_push_merger_deal/)