Expanding beyond the credit card market, Capital One Financial Corp. has established a thrift subsidiary to take deposits and offer a wider variety of consumer lending products.

Capital One, spun off last year by Signet Banking Corp. to become one of the top 10 bank credit card issuers, is noted for an analytical, scientific marketing approach that its executives have long said could be applied to other lines of business.

"We've all expected Capital One to expand into some of these consumer lending areas, and a thrift charter is probably the best way to do it," said Anthony R. Davis of Dean Witter Securities. "You're able to attract core funding from retail banking deposits, which is cheaper than using wholesale funds."

"It's been in the works for some time," said Moshe Orenbuch, an analyst with Sanford C. Bernstein & Co. "Actually, it's surprising how long it's taken."

Capital One, based in Falls Church, Va., is the second of the major specialized credit card banks to obtain a thrift charter. First USA Inc. of Dallas did so recently, a spokesman confirmed, but the company has not announced its intentions.

Capital One received approvals last month from the Office of Thrift Supervision, the Office of the Comptroller of the Currency, and Federal Deposit Insurance Corp. for an entity called Capital One FSB.

The subsidiary can be used to broaden the credit card bank's product mix and take in retail funds without relying on a branch network or brokered- deposit system.

"There's no storefront anywhere that will have a sign on it saying, Capital One FSB," said Capital One investor relations spokesman Paul Paquin. "There are no bricks and mortar associated with this. It's purely a structural entity that permits us to do other types of lending."

The thrift charter will allow Capital One to market home equity, auto, installment, and other loans to its 6.7 million credit card customers.

Those activities could put Capital One in direct competition with Signet, the Richmond, Va., bank that spawned it. But Signet spokeswoman Gail Sanders refused to comment about those implications.

Signet has been using the information-based strategies developed in the credit card unit to market consumer loan products nationwide.

"It's possible, in the future, that we could be direct competitors on some products in some markets," said Capital One's Mr. Paquin. But he also noted that Signet can re-enter the credit card business after Nov. 15, when a two-year noncompete agreement between the two companies expires.

One thing Capital One will not do with its thrift charter is actively market deposit products, such as certificates of deposit. Mr. Paquin said the thrift charter will allow Capital One to retain - and fund its lending with - deposits from secured credit cards that it currently has to place with commercial banks, including Signet.

On secured cards, which are marketed to people who are bankrupt or otherwise have difficulty getting credit, deposits are held as collateral for credit lines.

Mr. Paquin declined to quantify the secured-card deposits Capital One has placed at commercial banks.

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