The Federal Reserve announced Tuesday its approval of McLean-based Capital One Financial Corp.'s proposed $9 billion purchase of
online bank ING Direct.
The decision comes nearly nine months after Capital One agreed to pay $6.2 billion in cash and $2.8 billion in stock to Dutch financial services firm ING Groep NV for the online bank.
ING Direct comes with 7 million customers, $80 billion in deposits and $92 billion in assets, $41 billion of which are mortgage loans. Those additions would catapult McLean-based Capital One from being the eighth-largest U.S bank measured by deposits to the fifth, with an estimated $206 billion in deposits.
Consumer groups fought to block the merger out of concern it would create another behemoth bank whose failure could cripple the financial system.
The Fed, under the new Dodd-Frank reforms, had to weigh those complaints as it considered what the combination might mean for the stability of the financial system. Banking experts questioned whether the agency’s decision would set the tone for future deals.
While that is yet to be determined, the approval of the Capital One deal is the first significant test for the Fed in the aftermath of the banking crisis and ensuing reform.