In a 5-0 vote on Tuesday, the U.S. Federal Reserve Board of Governors approved Capital One’s $8.9 billion acquisition of ING Groep NV’s online banking division, the largest merger since the Dodd-Frank Act took effect.
Under the approval, the Federal Reserve requires that Capital One increase its internal oversight capabilities, as its size, complexity and diversification of business lines could be risky, Reuters reports.
While Capital One welcomed the approval and hopes to see the deal completed within the next few days, some groups are concerned about what the merger means for a healing U.S. financial system. John Taylor, the president of the National Community Reinvestment Coalition, a main critic of the merger, said that he was considering alternate ways to challenge the decision.
“The decision reinforces the perception and reality that the Federal Reserve serves the banking system first, and the American public second,” Taylor said, Reuters reports. “Should Capital One fail, [the Federal Reserve] will deeply regret today’s decision because the impact on the public will be catastrophic.”
Since Capital One proposed the merger last year, consumer advocacy groups have spoken out against the acquisition, saying that such a deal would create another “too big to fail” bank. The Federal Reserve said that the deal will move Capital One from number eight to number five on the list of the largest U.S. banks by deposits.