SAN FRANCISCO, Aug. 22, 2011 /PRNewswire-USNewswire/ -- Fifty California community-based organizations, members of the California Reinvestment Coalition (CRC), and policymakers have asked the Federal Reserve to hold public hearings in California on the proposed merger between Capital One and ING Direct.
In June, Capital One announced its intention to purchase ING Direct for $9 billion. If the merger is approved by the Federal Reserve, Capital One will be the fifth largest bank in the country, creating another bank that would be "too big to fail." The merger poses a risk to taxpayers who have become weary of bank bailouts and who are unclear what benefit a larger Capital One would bring to financial services for consumers.
This is particularly unclear in California—where the banks have made no significant commitments to the communities, despite benefiting greatly from their business. More than ten percent of Capital One's credit card lending and an estimated equivalent amount of ING's deposits come from California, but the banks invested nothing of their $1.7 billion profit back into California communities. To make matters worse, CRC's analysis of Capital One's home mortgage and small business lending shows that it largely ignores lower income neighborhoods in California.
Today, as the public comment period closes on this proposed merger, the California Reinvestment Coalition and its members have submitted over 50 letters to the Federal Reserve asking for public hearings in California. Joining them are various elected leaders including Congresswoman Maxine Waters, Congresswoman Barbara Lee, Congressman Bob Filner, and others.
"This merger proposes a risk to taxpayers who have been on the hook for bank bailouts," said Alan Fisher, Executive Director of the California Reinvestment Coalition. "The Federal Reserve should hold hearings on the proposed merger to demonstrate the risks and impacts of this merger and require them to make commitments to the communities that they stand to profit from."
Capital One has no branches in California, while ING has two cafes in San Francisco and Los Angeles. Without branches, these banks will reap profits in California without being held accountable under the Community Reinvestment Act.
The California Reinvestment Coalition advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services. CRC has a membership of almost 300 nonprofit organizations and public agencies across the State.
SOURCE California Reinvestment Coalition