The Federal Reserve Board's decision to hold public hearings and extend the comment period on Capital One Financial Corp.'s planned acquisition of ING Direct has drawn the ire of House Financial Services Chairman Spencer Bachus.
In a letter to Fed Chairman Ben Bernanke Wednesday, Rep. Bachus, an Alabama Republican, disputed claims that the deal would create another "too big to fail" bank and objected to arguments that Capital One has a poor record of lending in low-income neighborhoods. He also questioned why regulators would want to delay a deal that has potential to create jobs.
"Capital One's purchase of ING Direct represents an acquisition of foreign-owned assets by a U.S.-based job creator — a rare source of domestic job growth," Bachus wrote. "At a time of anemic growth and record high joblessness, unwarranted delays in our regulatory review process only add to the pervasive uncertainty that is holding back our economy.
Capital One announced in June that it would buy the U.S. operations of Dutch banking giant ING Group NV for roughly $9 billion. The deal would create the would create the nation's 11th-largest bank by assets and fifth-largest by deposits.
The comment period was scheduled to end in August, but late last week the Fed extended the deadline to Oct. 12 amid concerns about the size of the combined bank. In his own letter to Bernanke last month, Rep. Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee, urged the Fed to take its time to examine the impact the deal "with respect to the consolidation of banking assets."
The Fed also announced that it would hold three public hearings between now and then in Washington, D.C., Chicago and San Francisco in which it is expected to examine Capital One's lending record in low-income communities.
In his letter this week, Bachus said that Capital One has a "proven record" of complying with consumer protection laws and noted that it received "outstanding" and "satisfactory" ratings in its most recent Community Reinvestment Act examinations.
With respect to size, he pointed out that the combined Capital One and ING would hold just 1.52% of U.S. deposits.
"While the Federal Reserve should act deliberately in evaluating this or any other transaction under the bank Holding Company Act, extending the comment period in this instance appears to be unnecessary given the publicly available information on this transaction," Bachus wrote.