Capital One has been granted approval by the Federal Reserve to acquire ING Direct for $9 billion, which would create the nation's fifth-largest bank. The Federal Reserve, which regulates bank holding companies, announced the ruling Tuesday afternoon.
In a brief statement, the Fed wrote, "The Board's action directed Capital One to take specific steps to ensure that its risk-management functions, including compliance, are commensurate with its new size and complexity."
The deal was reviewed by the Fed under a new provision of the Dodd-Frank Act, which requires the central bank to consider whether mergers will result in "greater or more concentrated" risks to the financial system. Regulators held three hearings to allow public input on the purchase and extended the comment period amid opposition from advocates of various consumer and community groups.
The combined company will have more than $300 billion in assets. ING Direct is the U.S. online-banking arm of Dutch ING Groep NV.