(Reuters) - A U.S. banking regulator slowed Capital One Financial’s growth plans on Monday when it announced it would reopen the comment period for the bank’s takeover of HSBC’s U.S. credit card business.
The Office of the Comptroller of the Currency gave the public until December 19 to comment on the $2.6 billion deal.
Consumer groups say acquiring HSBC’s $30 billion credit card portfolio would only deepen Capital One’s “monoline” focus on credit cards, posing a risk to the financial system.
“I don’t think anybody at the OCC wants to have their name all over the approval of an application that is followed a year or two later by the fifth largest bank (by assets) failing because the credit card market crashes,” said John Taylor, President of the National Community Reinvestment Coalition, which has led the charge against the bank’s expansion.
The NCRC and 19 other consumer groups asked the OCC to hold hearings and extend the comment period in a letter on November 8, a day after the original comment period closed.
Capital One, which announced the HSBC deal in August, says its expansion will prove beneficial.
“Our history clearly demonstrates that our customers and local communities will see numerous benefits from this acquisition,” Tatiana Snead, a spokeswoman for Capital One said via email. “We appreciate the OCC providing an additional opportunity for any interested parties to express their views.”
The OCC’s move comes less than two months after the Federal Reserve held a series of hearings on Capital One’s proposed $9 billion takeover of ING Groep’s U.S. online banking unit.
The Fed reopened the comment period on that deal, a week after Representative Barney Frank’s wrote to the central bank urging more scrutiny.
Neither regulator has indicated when it will make a decision on Capital One’s proposed acquisitions.
Many view Capital One’s expansion as a test case for how the U.S. government will treat big-bank mergers following the financial crisis.
Last year’s Dodd-Frank law requires U.S. regulators to take systemic risk into account when evaluating a merger, in addition to public benefit, concentration of resources, unfair competition and other factors.
Reporting by Alexandra Alper; Editing by Tim Dobbyn