Capital
One,
Protested,
Tosses Out
$180 Billion,
Record
Disparate,
Issues
Unaddressed
By
Matthew
R. Lee
SOUTH
BRONX,
September 20
-- After weeks
of protest of
Capital One
and its
proposed
acquisition of
ING DIRECT,
Capital One
tossed out a
$180 billion,
ten year
lending
commitment at
the first of
three Federal
Reserve Board
public
meetings on
Tuesday.
The
pledge
pales in
comparison
with other
banks', and
doesn't
address the
predatory
lending issues
already at
Capital One,
even ignoring
the
business of
HSBC /
Household
International,
sued by
Attorneys
General
nationwide,
which Capital
One seeks to
acquire.
The
first
hearing was
held in
Washington,
with
opposition led
as elsewhere
by NCRC, with
the next two
in Chicago
and San
Francisco,
ignoring New
York where
Capital One
bought North
Fork bank and
runs New York
specific ads
with Alec
Baldwin and
Jimmy
Fallon.
Even
in
the Washington
DC area,
Capital One's
record is
disparate.
Inner City
Press / Fair
Finance Watch
has
reviewed the
Loan
Application
Register of
Capital One
for 2010,
during which
year Capital
One received
1034
applications
in the
District of
Columbia (and
109 in
California and
24 in
Illinois.)
The
2010
New York and
Louisiana
disparities of
Capital One
have already
been analyzed
for the
record. In the
District of
Columbia in
2010,
Capital One
denied 32.4%
of
applications
from African
Americans,
versus only
11.7% of
applications
from whites -
a denial rate
disparity of
2.77.
For
example,
in New York
State in 2010
Capital One
denied a
whopping
72.7% of
applications
from Latinos,
and 69.2% of
application
from
African
Americans,
both higher
that its
nationwide
numbers.
ICP
has timely
raised that
the on this
record the FRB
should
schedule a
public meeting
in New York,
where it
allowed
Capital One to
acquire
North Fork,
see e.g., http://www.highbeam.com/doc/1G1-143359086.html
Back
on
August 25,
three days
after the Fed
allowed the
comment period
to
close on the
application,
the Fed
admitted in
writing to
improperly
withholding
under the
Freedom of
Information
Act some of
Capital
One's many
communications
with the Fed,
writing to
Inner City
Press
that
"subsequent
to
the
Secretary's
response of
August 3,
2011, Board
staff was
informed that
an employee at
the Federal
Reserve Bank
of Richmond
located
additional
responsive
material. The
employee had
been
traveling
between the
date of your
request on
July 22, 2011
and the
date of the
Secretary's
response on
August 3,
2011.
Accordingly,
Board staff
was not aware
that these
additional
responsive
material
existed until
after the
Secretary had
responded to
your request
on
August 3,
2011."
With
Fed
chairman Ben
Bernanke out
in Jackson
Hole, Wyoming,
long time Fed
official Tom
Hoenig became
on his way out
a
whistleblower,
saying on
camera that he
has
"serious
doubts
about Capital
One's proposed
purchase of
ING Direct. 'I
have
very grave
concerns about
allowing these
amalgamations
of
institutions
that by their
very structure
are too big to
fail, too
interconnected
to fail and I
think the
burden should
be very
heavily
against that,'
Hoenig said."
Now
at
public hearing
in Washington,
Capital One
says this FRB
official
was wrong, and
$180 million
should make
the problems
go away.
There
is
still the
question of
why ING has
not filed an
application
for its
proposal to
acquire up to
9.8% of the
stock of
Capital One,
and to
control a seat
on Capital
One's board of
directors. And
there is
still a slew
of information
improperly
withheld by
the Fed under
FOIA.
The
two
other hearings
are as
follows:
Chicago
– Tuesday,
September 27,
2011,
beginning at
8:30 a.m. CDT,
at the Federal
Reserve Bank
of Chicago,
230 South
LaSalle
Street,
Chicago, IL.
San
Francisco –
Wednesday,
October 5,
2011,
beginning at
8:30 a.m. PDT,
at the Federal
Reserve Bank
of San
Francisco, 101
Market Street,
San
Francisco, CA.
The
Fed
also re-opened
and extended
its comment
period until
October 12. We
will continue
on this.
With
these two
acquisitions,
Capital One
could become a
fifth "too big
to fail" bank
in the US,
after JP
Morgan Chase,
Bank
of America,
Wells
Fargo and
Citigroup.
The
anachronistic
gang in
Capital One's
television
ads, along
with Alec
Baldwin, may
be funny, but
less so if
considered too
big to fail,
possibly
requiring
bailouts.
In
group's
initial
comments to
the Fed, less
has been said
about ING, in
part because
ING's US
business had
been directed
at a more
affluent
clientele, and
because ING
was not viewed
as the
applicant.
But
after Inner
City Press
filed a
Freedom of
Information
Act request
with the
Federal
Reserve Board
on July 22, a
partial
response from
the Federal
Reserve shows
that ING has
quietly sought
a ruling from
Fed General
Counsel Scott
Alvarez that
ING should not
have submit
any
application
subject to
public comment
to own up to
9.9% of
Capital One.
Click here
to view the
Fed's (first)
FOIA partial
denial letter,
from which
Inner City
Press has
already
appealed.
This
would exclude
public comment
and
consideration
of ING doing
business with
the likes of
Sudan, Iran,
Cuba, Syria
and others on
the US state
sponsors of
terrorism
list. ING had
admitted being
under
investigation
for, and
negotiating
with the US
Department of
Justice about,
such
violations,
and there have
been
expressions of
Congressional
concern, which
the Fed could
ignore by
granting ING's
stealth
request.
Fed
board &
Bernanke,
ING's Sudan
& Syria
business &
HSBC's
predatory
cards not
shown
The
documents
obtained under
FOIA show that
ING,
represented by
the Wall
Street law
firm of
Sullivan &
Cromwell, on
July 15 wrote
to the Fed's
Alvarez asking
for "written
confirmation
that [ING]
will not be
deemed to
directly or
indirectly
'control'
Capital One
for purposes
of the Bank
Holding
Company Act
upon the
consummation
of the Bank
Sale."
Earlier
in ING's 13
page request,
on which the
Fed has until
now not
solicited or
accepted any
public
comment, ING
says that the
shares with
which Capital
One would pay
it for ING
Direct would
"represent
between 9.7%
and 9.9% of
the
outstanding
shares of
Capital One's
Common Stock
on the closing
date." Click here to view some
of the
released
records,
including
Sullivan &
Cromwell's
letter to the
Fed for ING.
Under
the Bank
Holding
Company Act,
any holding
over 4.9% can
be considered
control. One
would think,
given the
issues raised,
that the Fed
would solicit
comment and
hold the
requested
public
hearings on
ING's request
to own nearly
10% of Capital
One. But it
has only come
about because
of the Fed's
partial FOIA
response.
Inner
City Press /
Fair Finance
Watch
immediately
submitted a
comment to the
Fed and its
chairman Ben
Bernanke
formally
demanding the
ING submit an
application,
and joining in
requests by
NCRC and
others for
public
meetings and
an extension
of the comment
periods until
at least
October 22.
In
a FOIA appeal
already filed
with but not
yet even
acknowledged
by the Fed,
Inner City
Press has
demanded all
withheld
records about
ING's stealth
request, as
well as the
withhold
portions of
Capital One's
application,
which range
from exhibits
about money
laundering to
ING's mortgage
portfolio.
Amazingly,
the Fed
mis-read Inner
City Press'
FOIA request
as only asking
from Fed
communications
with ING and
Capital One
about the
proposed
acquisitions,
when in fact
Inner City
Press
requested all
records
reflecting Fed
communications
concerning
either of the
two companies.
The Fed has
provided such
records,
including internal Fed
emails about
the Industrial
&
Commercial
Bank of China
and Governor
Warsh's
meeting with
its chairman,
in previous
responses to
Inner City
Press.
The
Fed has also
withheld
records about
an "ex parte"
meeting as far
back at May 26
between
Capital One's
Kevin Murray
(SVP of
Regulatory
Relations),
John Finneran
and Gary
Perlin with a
range of Fed
officials.
It
seems
the Fed, ING
and Capital
One have
already had
something to
hide in this
transaction,
including
seeking to
exclude from
public comment
and
consideration
ING illegally
doing business
in and with
Syria, Iran,
and Sudan. Now
they seek to
sweep through
and under the
carpet Capital
One's proposed
acquisition of
the predatory
lending
platform of
Household
International
from HSBC. But
it will
continue to be
opposed,
including at
all three
belatedly
announced Fed
hearings.
Watch this
site.
*
* *
, 
