Capital One

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Capital One Financial Corporation
Public company
Traded as
Industry Financial services
Founded 1988; 29 years ago (1988)
Richmond, Virginia, U.S.[1]
Founder Richard Fairbank, Nigel Morris
Headquarters McLean, Virginia[2]
Key people

Richard Fairbank
(Chairman, President and CEO)
Stephen S. Crawford
(Head of Finance and Corporate Development)[3]

R. Scott Blackley
Products Retail banking, Credit cards, Loans, Savings
Revenue Increase US$25.501 billion (2016)[2]
Decrease US$5.80 billion (2016)[2]
Decrease US$3.75 billion (2016)[2]
Total assets Increase US$357.033 billion (2016)[2]
Total equity Increase US$47.514 billion (2016)[2]
Number of employees
47,300 (2016)[2]
Capital ratio 10.1%[2]
Capital One Bank in Wake Village, Texas

Capital One Financial Corporation is a bank holding company specializing in credit cards, home loans, auto loans, banking and savings products headquartered in McLean, Virginia.[2]

Capital One is the eighth-largest commercial bank in the United States when ranked by assets and deposits.[4] and is ranked 9th on the list of largest banks in the United States by total assets. The bank has 755 branches[4] including 18 café style locations[5] and 2,000 ATMs. It is ranked #112 on the Fortune 500,[6] and conducts business in the United States, Canada, and the United Kingdom.[2] The company helped pioneer the mass marketing of credit cards in the 1990s, and it is one of the largest customers of the United States Postal Service due to its direct mail credit card solicitations.[7] In 2015, it was the 5th largest credit card issuer by purchase volume, after American Express, JP Morgan Chase, Bank of America, and Citigroup.[8]

Capital One is also the 4th largest bank auto lender, with a market share of 4.2% in 2016.[9]

In 2016, 62% of the company's revenues were from credit cards, 26% was from consumer banking, 11% was from commercial banking, and 1% was from other.[2]


Activities announcing the opening of the CapitalOne 360 Café in Boston.

Capital One operates 3 divisions as follows:[2]

  • Credit Cards - Capital One issues credit cards in the United States, Canada, and the United Kingdom. As of December 31, 2016, after JP Morgan Chase and Citigroup, Capital One was the 3rd largest credit card issuer, with an outstanding receivables balance of $91 billion, representing 12.1% of the total outstanding credit card receivable balance in the United States.[10] As of December 31, 2016, Capital One had a total of $97 billion in credit card loans outstanding in the United States and $8 billion of credit card loans outstanding in Canada and the United Kingdom.[2]
  • Commercial Banking - As of December 31, 2016, Capital One had $66 billion in loans outstanding secured by commercial, multifamily, and industrial properties.[2]


Monoline credit card company (1994-2004)[edit]

Capital One retail footprint

On July 27, 1994, Richmond, Virginia-based Signet Financial Corp (now part of Wells Fargo) announced the corporate spin-off of its credit card division, OakStone Financial, naming Richard Fairbank as CEO[12] Signet renamed the subsidiary Capital One in October 1994.[13] The spinoff was concluded February 28, 1995, making Capital One fully independent.[14]

At that time, Capital One was a monoline bank, meaning that all of its revenue came from a single product, in this case, credit cards.[15] This strategy is risky in that it can lead to losses during bad times.[15] Capital One attributed its relative success as a monoline to its use of data collection to build demographic profiles, allowing it to target personalized offers of credit direct to consumers.[16]

Capital One commenced operations in Canada in 1996.

Expansion into auto loans (1998-present)[edit]

Summit Acceptance Corporation, was acquired by Capital One in July 1998, PeopleFirst Finance LLC, was acquired by Capital One in October 2001, and Onyx Acceptance Corporationwas acquired by Capital One in September 2004. The companies were combined and rebranded as Capital One Auto Finance Corporation in 2003.[17]

In 1999, Capital One was looking to expand beyond credit cards. CEO Richard Fairbank announced moves to use Capital One's experience with collecting consumer data to offer loans, insurance, and phone service.[18]

In late 2002, Capital One and the United States Postal Service proposed a then-experimental negotiated services agreement for bulk discount in mailing services.[19] The resulting three-year agreement[20] was extended in 2006.[21] In June 2008, however, Capital One had filed a complaint[22] with the USPS regarding the terms of the next agreement,[23] citing the terms of the NSA of Capital One's competitor, Bank of America. Capital One subsequently withdrew its complaint to the Postal Regulatory Commission following a settlement with the USPS.[24]

Expansion into retail banking (2005-present)[edit]

While many other monolines were acquired by larger, diverse banks, Capital One expanded into retail banking with a focus on subprime customers.

Capital One acquired New Orleans, Louisiana-based Hibernia National Bank for $4.9 billion in cash and stock in 2005[25] and acquired Melville, New York-based North Fork Bank for $13.2 billion in cash and stock in 2006,[26] which reduced its dependency on credit cards from 90% to 55%.[27]

In 2007, Capital One acquired NetSpend, a marketer of prepaid debit cards, for $700 million.[28]

During the 2007 subprime mortgage financial crisis, Capital One closed its mortgage platform, GreenPoint Mortgage, due in part to investor pressures.[29][30][31]

In 2008, Capital One received an investment of US$3.56 billion from the United States Treasury as a result of the Troubled Asset Relief Program.[32][33] On June 17, 2009, Capital One completed the repurchase of the stock the company issued to the U.S. Treasury paying a total of US$3.67 billion, resulting in a profit of over $100 million to the U.S. Treasury.[34]

The U.S. Securities and Exchange Commission criticized Capital One's conduct during the crisis, claiming that the understated auto loan losses during the financial crisis of 2007-2008. In 2013, Capital One paid $3.5 million to settle the case, but was not required to directly address the allegations of wrongdoing.[35]

In February 2009, Capital One acquired Chevy Chase Bank for $520 million in cash and stock.[36][37][38][39]

In June 2011, ING Group announced the sale of its ING Direct division to Capital One for US$9 billion in cash and stock.[40] On August 26, 2011, the Federal Reserve Board of Governors announced it would hold public hearings on the Capital One acquisition of ING Direct, and extend to October 12, 2011, the public comment period that had been scheduled to end August 22.[41] The move came amidst rising scrutiny of the deal on systemic risk, or "Too-Big-to-Fail," performance under the Community Reinvestment Act, and pending legal challenges. A coalition of national civil rights and consumer groups, led by the National Community Reinvestment Coalition, were joined by Rep. Barney Frank to challenge immediate approval of the deal. The groups have argued that the acquisition is a test of the Dodd-Frank Wall Street Reform and Consumer Protection Act, under which systemically risky firms must demonstrate a public benefit that outweighs new risk before they are allowed to grow. Kansas City Federal Reserve Bank head Thomas M. Hoenig was also skeptical of the deal.[42][43] In February 2012, the acquisition was approved by regulators and Capital One completed its acquisition of ING Direct.[44] Capital One received permission to merge ING into its business in October 2012,[45] and rebranded ING Direct as Capital One 360 in November 2012.[46][47][48] Following the acquisition, ING direct was rebranded Capital One 360.[49]

In August 2011, Capital One reached a deal with HSBC to acquire its U.S. credit card operations.[50] Capital One paid US$31.3 billion in exchange for US$28.2 billion in loans and $600 million in other assets. The acquisition was completed by May 2012.[51]

On February 26, 2012, along with several other banks, Capital One announced support for the Isis Mobile Wallet payment system.[52] However, in September 2013, Capital One dropped support for the venture.[53]

Like many other retail banks, Capital One has been slowly decreasing its number of physical locations.[54] In 2015, the bank closed 186 locations.[55]

On February 19, 2014, Capital One became ¼ owner in ClearXchange, a P2P (person to person) money transfer service designed to make money transfers to customers within the same bank and other financial institutions via mobile phone number or email address. The service will be available to Capital One Bank customers in the 2nd half of 2014. ClearXchange's other owners include Bank of America, Wells Fargo, and JP Morgan Chase.[56]

In January 2015, Capital One acquired Level Money, a budgeting app for consumers. The app will remain a standalone application.[57]

On July 8, 2015, Capital announced that it has acquired Monsoon, a design studio, development shop, marketing house and strategic consultancy.[58]

In August 2015, Capital One agreed to acquire General Electric Co.'s Healthcare Financial Services unit for USD $9-billion. The transaction involves USD $8.5-billion of loans made to a wide array of sectors including senior housing, hospitals, medical offices, outpatient services, pharmaceuticals and medical devices.[59]

In October 2016, Capital One acquired Paribus, a price tracking service, for an undisclosed amount.[60][61]

Sports marketing[edit]

Since 2001, Capital One has been the principal sponsor of the college football Florida Citrus Bowl, rebranding it the Capital One Bowl in 2003. It sponsors a mascot challenge every year, announcing the winner on the day of the Capital One Bowl. Capital One is one of the top three sponsors of the NCAA, paying an estimated $35 million annually in exchange for advertising and access to consumer data.[62][63] Capital One also sponsored an English soccer cup competition known as the Capital One Cup, from 2012 to 2016. They previously sponsored Sheffield United F.C. from 2006 to 2008.

Corporate citizenship[edit]

Capital One operates some charitable programs, such as the "No Hassle Giving" web portal, in which Capital One covers the transaction fees on customer and non-customer donations made through the site.[64] The accountability organization National Committee for Responsive Philanthropy has been highly critical of Capital One's relatively low rate of giving, stating that "Capital One's philanthropic track record is dismal".[65] The organization pointed out that Capital One's donations of 0.024% of revenue were much less than the industry median of 0.11% of revenue.[65] Capital One has disputed the groups figures, saying that "... In 2011 alone, our giving totals are more than 6 times greater ($30 million) than the number given by the NCRP".[66]

Criticism and legal actions[edit]

In July 2012, Capital One was fined by the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau for misleading millions of its customers, such as paying extra for payment protection or credit monitoring when they took out a card.[67] The company agreed to pay $210 million to settle the legal action and to refund two million customers.[68] This was the CFPB's first public enforcement action.[69]

In August 2014, Capital One and three collection agencies entered into an agreement to pay $75.5 million to end a consolidated class action lawsuit pending in the United States District Court for the Northern District of Illinois alleging that the companies used an automated dialer to call customers’ cellphones without consent, which is a violation of the Telephone Consumer Protection Act of 1991.[70] It is notable that this legal action involved informational telephone calls, which are not subject to the "prior express written consent" requirements which have been in place for telemarketing calls since October 2013.[71]

2014 amendment to terms of use to allow personal visits[edit]

In 2014, Capital One amended its terms of use to allow it to "contact you in any manner we choose", including a "personal visit . . . at your home and at your place of employment." It also asserted its right to "modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose."[72] Los Angeles Times writer David Lazarus commented that "Cap One has made deliberate decisions that seem intended to overreach and intimidate, confirming in the eyes of many the company's thoughtlessness and occasional ruthlessness".[73] Emily Rusch, the executive director of the California Public Interest Research Group, found the company's assertion of a right to "spoof" Caller ID particularly disturbing, saying "Now more than ever, consumers need to be able to trust companies".[72]

Capital One spokeswoman Pam Girardo responded that the company would not actually make personal visits to customers except "As a last resort, . . . if it becomes necessary to repossess [a] sports vehicle".[72] Capital One also attributed its assertion of a right to "spoof" as necessary because "sometimes the number is 'displayed differently' by 'some local phone exchanges,' something that is 'beyond our control'".[74]

Girardo told the New York Times that the company was "reviewing" the language involved. David Lazarus noted that "now that a little sunlight has been applied, the company is not as comfortable as it previously was with behaving like a total maniac. In the meantime, cardholders can make up their own minds. Do they want to believe the non-binding explanations of a company representative or the legally enforceable language that's currently in their written contracts?"[72]

See also[edit]


  1. ^ Capital One History, Capital One, retrieved 25 Jan 2017 
  2. ^ a b c d e f g h i j k l m n o p "Capital One Financial Corporation 2016 Form 10-K Annual Report". 
  3. ^ a b Jennifer Surane (5 May 2016). "Capital One Names Blackley CFO as Crawford's Duties Expanded". Bloomberg. Retrieved 3 Apr 2017. 
  4. ^ a b "Large Commercial Banks". Federal Reserve Board. 
  5. ^ "Capital One 360 Café Locations". Capital One. 
  6. ^ "Fortune 500". CNN. 
  7. ^ MYERBERG, PAUL (January 1, 2010). "Capital One Bowl: No. 13 Penn State (10-2) vs. No. 12 L.S.U. (9-3)". New York Times. 
  8. ^ Comoreanu, Alina (February 10, 2017). "Market Share by Credit Card Issuer". WalletHub. 
  9. ^ "Which U.S. Banks Hold The Largest Share In The Country's Auto Lending Industry?". Nasdaq. November 11, 2016. 
  10. ^ "The Four Largest Card Issuers Now Hold 60% Of All U.S. Credit Card Debt". Forbes. March 21, 2017. 
  11. ^ Hoffman, William (March 3, 2017). "Chase Ties Ally as Top Bank Auto Lender". Auto Finance News. 
  13. ^ Conn, David (October 12, 1994). "Signet renames credit card subsidiary Capital One". Baltimore Sun. 
  14. ^ "CAPITAL ONE REPORTS FIRST QUARTER EARNINGS". PR Newswire. 19 Apr 1995. Retrieved 9 Feb 2014. 
  15. ^ a b Perez, Saul (March 5, 2015). "Capital One's history: From credit cards to a diversified bank". Market Realist. 
  16. ^ Wheatley, Malcolm (November 1, 2001). "Capital One Builds Entire Business on Savvy Use of IT". CIO magazine. 
  17. ^ "PeopleFirst Changes Brand to Capital One Auto Finance" (Press release). PRNewswire. Jun 27, 2003. 
  18. ^ Mcnamee, Mike (November 21, 1999). "Capital One: Isn't There More To Life Than Plastic?". Bloomberg L.P. 
  19. ^ "Postal Service Files Capital One Negotiated Service Agreement". 20 Sep 2002. Retrieved 5 Feb 2014. 
  20. ^ "Experimental Rate and Service Changes to Implement Negotiated Service Agreement with Capital One: OPINION AND RECOMMENDED DECISION" (pdf). 15 May 2003. Retrieved 12 Feb 2014. 
  21. ^ Melissa Campanelli (25 Aug 2006). "PRC Says OK To Capital One NSA Extension". Direct Marketing News. Retrieved 5 Feb 2014. 
  23. ^ Bryan Yurcan (8 Jan 2009). "USPS, Capital One dispute remains in discovery". Direct Marketing News. Retrieved 5 Feb 2014. 
  24. ^ "Postal Regulatory Commission Proceedings". Retrieved 5 Feb 2014. 
  25. ^ "Capital One Completes Acquisition of Hibernia Corporation" (Press release). U.S. Securities and Exchange Commission. November 16, 2005. 
  26. ^ "Capital One Completes Acquisition of North Fork Bancorporation" (Press release). U.S. Securities and Exchange Commission. December 1, 2006. 
  27. ^ Moyer, Liz (March 4, 2006). "A Hot Time In Banking". Forbes. 
  28. ^ "Capital One Acquires Nation's Prepaid Card Leader NetSpend" (Press release). PRNewswire. August 7, 2007. 
  29. ^ "Capital One Closes Wholesale Mortgage Unit" (Press release). PRNewswire. August 20, 2007. 
  30. ^ Bauerlein, Valerie (August 21, 2007). "Capital One to Close Its GreenPoint Unit". The Wall Street Journal. (subscription required)
  31. ^ "Capital One Financial Closes Wholesale Mortgage Unit". Associated Press. CNBC. August 20, 2007. 
  32. ^ "Capital One, Form 8-K, Current Report, Filing Date Nov 18, 2008" (PDF). November 18, 2008. 
  33. ^ "CAPITAL PURCHASE PROGRAM Transaction Report" (PDF). Tarp Transactions. United States Treasury. November 17, 2008. 11/14/2008 Capital One Financial Corporation / McLean VA / Purchase Preferred Stock w/Warrants / $3,555,199,000 / Par 
  34. ^ "Capital One, Form 8-K, Current Report, Filing Date Jun 17, 2009". June 17, 2009. 
  35. ^ Protess, Ben (April 25, 2013). "DEALBOOK; Capital One Settles Charges It Understated Loan Losses". The New York Times. 
  36. ^ "Capital One to Buy Chevy Chase Bank". The New York Times. December 4, 2008. 
  37. ^ Fitzpatrick, Dan (December 4, 2008). "Capital One to Acquire Chevy Chase Bank". The Wall Street Journal. (subscription required)
  38. ^ Goldfarb, Zachary A.; Appelbaum, Binyamin (December 4, 2008). "Capital One Awoke To Its Dream Deal". The Washington Post. 
  39. ^ "Capital One Completes Acquisition of Chevy Chase Bank" (Press release). PRNewswire. February 27, 2009. 
  40. ^ "ING To Sell ING Direct USA to Capital One" (Press release). ING Group. June 16, 2011. 
  41. ^ "Federal Reserve Board announces public meetings on the notice by Capital One Financial Corporation to acquire ING Bank". Federal Reserve System. August 26, 2011. 
  42. ^ Felsenthal, Mark (August 25, 2011). "Fed's Hoenig Says Doesn't See Recession Looming". Reuters. 
  43. ^ Pearlstein, Steven (August 28, 2011). "Steven Pearlstein: Time to say no to bank consolidation". The Washington Post. 
  44. ^ "Capital One Completes Acquisition of ING Direct" (Press release). PRNewswire. February 17, 2012. 
  45. ^ "Conditional Merger Approval" (pdf). Office of the Comptroller of Currency. 17 Oct 2012. Retrieved 13 Feb 2014. 
  46. ^ Bryant Ruiz Switzky (8 Nov 2012). "ING Direct rebranded as Capital One 360". Washington Business Journal. Retrieved 13 Feb 2014. 
  47. ^ "Capital One, Form 8-K, Current Report, Filing Date Jun 16, 2011" (PDF). Retrieved Mar 19, 2013. 
  48. ^ "ING completes sale of ING Direct USA". Reuters. February 17, 2012. 
  49. ^ Campbell, Dakin (November 7, 2012). "Capital One Rebrands ING Direct as Orange Ball Gets '360' Motif". Bloomberg. Retrieved November 7, 2012. 
  50. ^ Dan Wilchins; Denny Thomas (10 Aug 2011). "Capital One bulks up U.S. cards with HSBC deal". Reuters. Retrieved 5 Feb 2014. 
  51. ^ Simon Zhen (2 May 2012). "Capital One Completes Purchase of HSBC US Credit Cards". MyBankTracker. Retrieved 5 Feb 2014. 
  52. ^ "Chase, Capital One and Barclaycard First to Place Their Cards in the Isis™ Mobile Wallet". 26 Feb 2012. Retrieved 9 Feb 2014. 
  53. ^ Stephanie Mlot (20 Sep 2013). "Capital One Drops Support for Isis Mobile Wallet". PC Magazine. Retrieved 9 Feb 2014. 
  54. ^ Andy Medici (4 May 2016). "Here's how much Capital One is spending this year to close, renovate its branches". Washington Business Journal. Retrieved 17 April 2017. 
  55. ^ Blake Ellis (25 Jan 2013). "Say goodbye to more bank branches". MSN Money. Retrieved 9 Feb 2014. 
  56. ^ "Clear Xchange Press Release" (Press release). ClearXchange. 26 Feb 2014. Retrieved 10 Mar 2014. 
  57. ^
  58. ^ Perez, Sarah (8 July 2015). "Capital One Acquires Oakland-Based Design And Development Firm Monsoon". TechCrunch. Retrieved 8 July 2015. 
  59. ^ "Capital One to Acquire GE Capital's U.S. Healthcare Finance Unit" (Press release). Capital One Financial. 11 Aug 2015. 
  60. ^ Perez, Sarah (October 6, 2016). "Capital One acquires online price tracker Paribus". TechCrunch. 
  61. ^ Yurcan, Bryan (October 12, 2016). "Capital One Adds to Its Growing List of Fintech Deals". American Banker. 
  62. ^ Kristi Dosh (3 Nov 2013). "Capital One maximizing March's madness". ESPN. Retrieved 10 Feb 2014. 
  63. ^ JJ Hornblass (11 Apr 2013). "Cap One Uses March Madness to Mine Customer Data, Even After Tournament". Bank Innovation. Retrieved 10 Feb 2014. 
  64. ^ "Individual Donations Add Up With Capital One's No Hassle Giving Program" (Press release). Business Wire. November 25, 2009. 
  65. ^ a b "Doubt Over Capital One's Commitment to Philanthropy". NCRP. 4 Oct 2011. Retrieved 10 Feb 2014. 
  66. ^ Associated Press (5 October 2011). "Charity group wary of Capital One-ING merger". NBC news. Retrieved 13 Feb 2014. 
  67. ^ "Capital One fined for misleading millions of customers". BBC News. July 18, 2012. 
  68. ^ "Capital One, Form 8-K, Current Report, Filing Date Jul 18, 2012" (PDF). Retrieved Mar 19, 2013. 
  69. ^ "Capital One to pay $210 million in fines, consumer refunds". CNN Money. July 18, 2012. Retrieved Sep 6, 2013. 
  70. ^ Dale, Margaret A (19 August 2014). "Capital One to Pay Largest TCPA Settlement on Record". The National Law Review. Proskauer Rose LLP. ISSN 2161-3362. Retrieved 23 August 2014. 
  71. ^ Slawe, Meredith C.; Madway, Brynne S. (11 August 2014). "Capital One Agrees to $75 Million Telephone Consumer Protection Act (TCPA) Settlement". The National Law Review. Drinker Biddle & Reath. Retrieved 23 August 2014. 
  72. ^ a b c d David Lazarus, "Capital One says it can show up at cardholders' homes, workplaces", Los Angeles Times, February 17, 2014
  73. ^ David Lazarus, "Another complaint about Capital One bafflegab", Los Angeles Times, February 17, 2014. Lazarus's comment involved both the terms of service changes and other customer complaints.
  74. ^ Amanda Alix, "Capital One to Customers: You Can't Hide From Us", February 19, 2014

External links[edit]