The merger between Capital One and ING Direct is expected to preserve or grow hundreds of jobs in the First State. But, what is the impact on the lending environment?
Because the transaction involved a Delaware-based bank (ING Direct), the State Bank Commissioner Robert Glen was part of the review process, along with the Federal Reserve and the Office of the Comptroller of the Currency. Glen’s office held a public hearing on the merger in October. “Our focus is the impact on Delaware and whether the acquirer, in this case Capital One, has the financial and managerial resources to take over a Delaware bank like ING,” Glen said. “Also, the impact on local banking services, the impact on competition, and the impact on the economy and employment here in Delaware.”
Delaware Economic Development Office Director Alan Levin said the state obtained a commitment from Capital One during the negotiations that it would retain the 1,350 ING jobs already in the First State. In a separate transaction, Capital One’s acquisition of the HSBC credit card portfolio preserves 250 to 300 jobs. Capital One also plans to bring 500 new jobs to Delaware by the end of 2013.
The jobs are “across the financial services spectrum,” according to Levin. “They’re not just call center jobs. These are jobs in every facet of banking.”
The concern about the merger went beyond jobs for Rashmi Rangan, Executive Director of the Delaware Community Reinvestment Action Council. Rangan said ING’s culture was centered around “building a community of savers, and savings products. “Our goal would be, moving forward, to maintain the great, good stuff that ING had, and to make sure that what Capital One says is great in the communities where they operate, that we see that ‘greatness’ in the State of Delaware.”
The Capital One acquisition of ING Direct would create the nation’s fifth-largest bank. It is the first bank deal reviewed by the Fed under the Dodd-Frank Act, a reform law enacted after the recession and crises in banking and lending.