The former chair of the House Financial Services Committee has asked the Federal Reserve to examine the systemic risk posed by Capital One’s purchase of ING Direct.
Congressman Barney Frank (D-Mass.) recently wrote a letter to Fed Chairman Ben Bernanke requesting an extended public comment period of 60 days or more on the purchase, MyBankTracker.com reports.
“This proposed purchase would create the fifth largest bank in the United States,” Frank wrote, according to MyBankTracker.com. “For this reason alone, care should be taken to thoroughly examine the impact of this purchase with respect to the consolidation of banking assets, the provision of credit by the resulting bank, and compliance with the Community Reinvestment Act.”
Earlier this month, the National Community Reinvestment Coalition also sent a letter to the Fed that said the creation of additional “too-big-to-fail” bank would be another risk in the financial industry.
“Should a systematically important bank be allowed to become bigger without a clear case that it will benefit society?” John Taylor, the president and CEO of NCRC, said, MyBankTracker.com reports. “The answer is emphatically no.”
The ING Direct USA deal was announced earlier this summer. Last week, Capital One also entered into an agreement to purchase a credit card portfolio worth roughly $30 billion from HSBC.
If the Fed does not permit an extension of the comment period for the ING Direct deal, the comment period is officially closed as of Thursday.