Capital One is the thirteenth biggest bank in the country, with $200 billion in assets. It’s on a buying spree that it hopes will make it half again as big.
In June, it agreed to snap up ING Direct for $9.2 billion and earlier this month it said it would pay $2.6 billion for HSBC’s $30 billion credit-card portfolio. As Steven Davidoff points out in today’s New York Times, that would bring Capital One’s assets to $300 billion. It would be the fifth biggest bank in the country by deposits, behind Citibank.
It’s good to see this column, even if it is stuffed inside the business section, because press coverage of Capital One’s moves toward too big to fail status has been awfully scant. The WSJ, for instance, gave the news all of 430 words on C3 when it broke.
That’s probably because even a $300 billion Capital One would still be tiny compared to behemoths like JPMorgan Chase, Bank of America, and Citigroup, each of which have $2 trillion in assets.
But $300 billion is still a very big bank. And it seems that buying your way to No. 5 ought to be worth a bit of scrutiny.
Very few of the press accounts (David Weidner’s MarketWatch post and a brief Bloomberg piece are exceptions) raised the possibility this deal could be questioned until House Democrat Barney Frank last week asked the Fed to delay it to study the potential implications. Why not?
Community interest groups led by the National Community Reinvestment Coalition, which oppose the deal, say that Capital One is already classified under Dodd-Frank as systemically important since it has more than $50 billion in assets. Why should any such bank be allowed to get bigger?
Good question.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum. Tags: Banks, Capital One, Deals, The New York Times, Too Big To Fail