Critics Say Bank Should Not Be Allowed To Expand Unless It Does More to Help Community
- Posted on September 30, 2011 at 4:42am by
Becket Adams
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Among the critics who took aim at Capital One Financial Corp’s business model earlier this week was the Reverend Jesse Jackson.
His criticism?
He says the bank’s credit-card business is too much of a risk for the health and stability of the U.S. financial system.
Despite the bank’s recent pledge to hire new workers and invest in struggling communities, Jackson said Capital One has a troubling business pattern of marketing costly credit cards to vulnerable borrowers, according to a recent Wall Street Journal (WSJ) report.
“As Capital One vacuums up safe bank deposits, it spits out higher risk credit cards,” said Rev. Jackson. “It is clear that Capital One has no commitment to legitimate community banking.”
Rev. Jackson was one of several speakers at a hearing the Federal Reserve held in Chicago to give the public a chance to weigh in on Capital One’s plans to buy ING Direct USA, the U.S. online-banking business owned by ING Groep, reports the WSJ.
The proposed deal between Capital One and ING would amount to a $9 billion and would therefore make Capital One the fifth-largest bank in the nation (based on deposits).
The Fed is reviewing the acquisition to determine whether it would create a firm so risky that the government would have to bail it out should it fail.
“Capital One’s general counsel John Finneran rejected allegations that the bank is too entrenched in the credit card business,” writes Maya Jackson Randall of the Wall Street Journal.
“Capital One began a journey in 2005 to diversify our lending activities beyond credit cards into other traditional consumer, small-business and commercial loans,” he said, adding that the company’s card portfolio has shrunk by about $17 billion, or 25 percent, since 2008.
Nevertheless, consumer interest groups such as the National Community Reinvestment Coalition (NCRC) oppose the Capital One deal. Like Rev. Jackson, the consumer groups say that Capital One has a poor track record of lending to minorities and small businesses, reports the WSJ.
“Capital One should be judged by its track record, not by what it promises under pressure,” said NCRC President John Taylor.
Critics of the deal say the Federal Reserve should not allow the bank to expand unless it does more to help struggling communities.
As a part of its efforts to address these public concerns, the bank has proposed a variety of hiring and lending initiatives. Last week, it promised to invest $180 billion over the course of 10 years in low and moderate-income communities.
“We expect to bring hundreds of new, high quality jobs to the state and to become an active and engaged part of the Delaware business community,” said Capital One Chief Executive Richard Fairbank.
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Comments (88)
netmail
Posted on September 30, 2011 at 9:50amAs a former consumer loan officer from the mid 80‘s thru the 90’s, I can say that lending practices extended to minorities by govt mandate often did them more harm than good. It was always my philosophy to lend to help…never lend to hurt…mandate or not. I was ultimately forced out of that career.
Report Post »Jaycen
Posted on September 30, 2011 at 10:28amWho cares what Jesse Jackson says. Like he knows anything about the US financial system.
Report Post »ACLUHater
Posted on September 30, 2011 at 10:40amWhat he really means is they need to hire more blacks. POS.
Report Post »DanWesson455
Posted on September 30, 2011 at 1:40pmThe Revvverend Jacccckson is a hate spewing, gay bashing, womanizing liar, cheat and DIP WAD. He deserves no more respect than the dog dung I scrape off my boot. The best thing to see what should happen to him is to see his eyes roll back, the side of his face droop and see him in a wheelchair for the rest of his life drooling on himself.
Report Post »jimtrees
Posted on September 30, 2011 at 10:12pmNow that Obama is in election trouble, it’s going to be shake-down, full throttle.
Report Post »Kerri g
Posted on September 30, 2011 at 9:49amI have a message for Mr. Jackson, If you don’t like it, don’t do business with them. How simple is that? This is America, you DO have choices. Nuff said.
Report Post »truthsetsfree
Posted on September 30, 2011 at 9:46amThe last time banks were FORCED to help “the community” it ended in a DISASTER! Socializing banks is one of the dumbest ideas ever. I believe this was orginally a Bill Clinton idea, carried over in the GW years. Banks saw that giving loans to those that should have never been allowed in a bank was just plain nuts. The government (Barney and company) made them continue down that road full of potholes and when the Bush administration tried to reign it in they were blasted as RACIST by the Congressional Black Caucus and Barney and Dodd. The banks were left with no alternative but to bundle the mortages to unload them. Today we blame the banks and let the real CROOKS get off scott free, worse yet we let the foxes guard the corrupt hen house.
Report Post »smithclar3nc3
Posted on September 30, 2011 at 10:26amYou’re right it was Bill Clinton idea and Georger Bush tried to stop it in 2001,agian in 2003,agin in 2005 again in 2006 and in 2007 was block ever single time by Democrats with Barney Frank leading the way.
Report Post »Here’s what is the root cause of the all the red tape that destroyed our economy.
It was Bill and Andrew Coumo’s requirement to pass Grahm,leach bailey act.
Crucial to the passing of this Act was an amendment made to the GLB, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a “less than satisfactory [sic] rating at its most recent CRA exam”, essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA).[19] This was an issue of hot contention, and the Clinton Administration stressed that it “would veto any legislation that would scale back minority-lending requirements
Amy
Posted on September 30, 2011 at 9:30amI’m not for banks being “too big to fail” and for that reason I use a small local bank. However, the “pressure” from the left to force banks to do business in a certain way is wrong and pretty much what created the mortgage and banking mess in the first place…
Report Post »Derek01
Posted on September 30, 2011 at 9:21amWith losers like jesse it’s always for someone else to do it. Never him. Crocodile mouth, canary @$$. If this is such a bright idea then he should put up his own money, start a bank and show others how helpful and profitable it is.
Report Post »DYNA
Posted on September 30, 2011 at 9:35am@DEREK01
Report Post »You are right. Jesse and others like him should stop being leaches. And for all who are in government
elected or not, stop wasting taxpayers money on “creating” false jobs. If they really know so much, they can leave the public sector of false jobs, and create something of their own in the private sector.
It is called free enterprise. We need more industrialists who are industrious, not mooching maggots.
Rickfromillinois
Posted on September 30, 2011 at 9:19amComplaining about giving high interest credit cards to those least likely to pay the credit card bills? Isn’t that why the credit cards issued to them has such high interest rates, because they are the most likely NOT to pay the credit card company back? Wouldn‘t they also get into allot of trouble if they didn’t give them any credit cards at all? As for Jesse Jackson, this is extortion plain and simple. When he says “community investment” what he means is give HIM money. How do you explain that he is a multimillionaire? In addition, just why is it the responsibility of a bank to “invest” in a community? How about providing a service to a community? Isn’t that enough? If the “community” is unhappy with the bank then they can go elsewhere. The whole concept is ludicrous.
Report Post »jeff1158
Posted on September 30, 2011 at 9:16amGood morning to everyone!! I am a 53 year old, white, fundamental Christan, 50 to 70K earner. I am a janitorial supply salesman(TP, paper towel, hand soap). Just an average American citizen. Except for one thing. When I was 18, my father handed me “Atlas Shrugged”. I could not read it fast enough. Even at that age, I knew the difference between a producer and a moucher. Since that time I have reread the book along with Ayn Rand’s other work.
Report Post »Every story I read on the Blaze is right out of “Atlas Shrugged”. Midas Mulligan being told by the government who to loan money to. Companies being told they cannot move their businesses to other states. Employers being told they must hire a person based on his or her need not on the merits of that person’s ability. It’s all there!!
If you have not read the book, please do so. Your eyes will be opened to what is coming. Somehow we must quit feeding the moucher class. Is this class warfare? Hell yes!! But we did not start the war. They did by trying to take what we EARN!!
Be prepared. It will come crashing in on them. Let it happen. We have the ability and stregth to rebuild. I know we can. I know I can!
Many would say”How can you be a Christan and have this attitude?”. The Bible says “them that don’t work, don’t eat.”. I am to care for widows and orphans, not whores and bastards. Each of us are to take our talents and use them, not bury them. Remember The Lord was very hard on the man who buried
Teleologicus
Posted on September 30, 2011 at 8:54amNobody, not even Jesse Jackson, could possibly be THIS stupid. Redistributing the wealth takes many forms. One of them is lending money to people who cannot pay it back. Another is providing services to those who cannot afford them. All of this is affirmative action finance. It could be called Share The Wealth.
Report Post »stage9
Posted on September 30, 2011 at 8:49am“…Capital One has a troubling business pattern of marketing costly credit cards to vulnerable borrowers..”
…and those “borrowers” are too stupid to throw those credit card offers in the trash…”
Report Post »pwatkins
Posted on September 30, 2011 at 8:48amHere is a perfect example of why we don’t need to elect Cain, bc even though he claims not to be persuaded by the likes of Jesse Jackson and Al Sharpton if he gets in office he will be able to nothing else but answer to them whiners. We need someone that can get our country back on track for all Americans and the blacks would never let him Cain do that without more diaster.
Report Post »thegodfather
Posted on September 30, 2011 at 8:33amThe master of extortion rises again.
Jessie: “Banks are evil!..Boycott Banks!..No justice No Peace!”…..
“Oh wait. You’ll make a “donation” to the Rainbow Coalition?..Okay then”.
“Up with Banks!…Banks are our friends!”
Report Post »smithclar3nc3
Posted on September 30, 2011 at 8:40amSomeone tell that ignorant a55 Jesse that what he is sugeesting is the ROOT cause of our economic collapse. See bill clinton and andrew coumo put that very pervision in the graham leach bailey act of 1999. A regulatory act that allowed banks to expand business Clinton would only sign the bill if banks were required to increase the amount CRA loans as it grew.
Report Post »smithclar3nc3
Posted on September 30, 2011 at 8:44amCrucial to the passing of this Act was an amendment made to the GLB, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a “less than satisfactory [sic] rating at its most recent CRA exam”, essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA).[19] This was an issue of hot contention, and the Clinton Administration stressed that it “would veto any legislation that would scale back minority-lending requirements
Report Post »smithclar3nc3
Posted on September 30, 2011 at 8:45amEveryone should be thanking Bill for planting the seed of our economic collapse
Report Post »Crucial to the passing of this Act was an amendment made to the GLB, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a “less than satisfactory [sic] rating at its most recent CRA exam”, essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA).[19] This was an issue of hot contention, and the Clinton Administration stressed that it “would veto any legislation that would scale back minority-lending requirements
JQCitizen
Posted on September 30, 2011 at 8:21amSecond Verse, same as the First…..
Isn‘t this EXACTLY what happened to create the HOUSING BUBBLE when BANKS WERE BLACKMAILED BY GOVERNMENT into doing business with people who didn’t meet reasonable criteria for participation?
Shows LIBS NEVER LEARN….
OR MAYBE they think WE DON’T!!!!!!
Report Post »matt708
Posted on September 30, 2011 at 8:14amjesse are you blackmailing the bank. stfu you idiot
Report Post »angelcat
Posted on September 30, 2011 at 8:03amDoes the bank hire people to work there – tellers, janitors, loan officers, etc.? Then it is helping the community. It is not the bank‘s fault if the people in the community don’t want, can’t keep, or aren’t qualified for those jobs. It is their own fault.
Report Post »LibzLie
Posted on September 30, 2011 at 7:59amWhat is truely sad, is that so many of his people believe the garbage that comes out of his mouth.
Report Post »raderby
Posted on September 30, 2011 at 7:39amEver hear about the Community Reinvestment Act? Caused housing collaspe. Arrest this Jackson idiot for insurrection and sedition. If not for that, arrest him for being a psychopath and a danger to the people. Padded cell for this fool.
Report Post »Servant Of YHVH
Posted on September 30, 2011 at 8:08amWhat you said should just be the start of it for him. They say that we don’t need to do anything about the Fed, well I would like to know why this idiot was invited to speak to them. The only thing that he is good at is “screwing” people, perhaps that is what they wanted him for. To show them more ways to screw the American people and then blame it on businesses. We talk about how bad it is when we have all these illegal ALIENS coming into the country? Allowing people like Jackson and Sharpton and others like them to stay in this country is just as big a mistake as allowing the illegal ALIENS to stay.
Report Post »Chasvs391
Posted on September 30, 2011 at 7:33amMore cash for the Black community? Isn’t the way you get more cash is by working? Oh, I forgot, they don’t need to work they are owed this cash! Puke every time I see these racist hucksters!
Report Post »LIBS-ARE-DINGLEHEADS
Posted on September 30, 2011 at 7:30amJesse…just….simply SHUT………………UP!
Report Post »drago
Posted on September 30, 2011 at 7:29amSo, where does jj keep all his money he has fleeced from blacks over the years…….oh thats right, jj is nothing more than a po *****……………
Report Post »smithclar3nc3
Posted on September 30, 2011 at 7:21amSomeone tell that ignorant a55 Jesse that what he is sugeesting is the ROOT cause of our economic collapse. See bill clinton and andrew coumo put that very pervision in the graham leach bailey act of 1999. A regulatory act that allowed banks to expand business Clinton would only sign the bill if banks were required to increase the amount CRA loans as it grew.
Report Post »IT’S THE ROOT CAUSE OF OUR ECONOMIC DISASTER
dallenh
Posted on September 30, 2011 at 7:21amTypical JJ rhetoric… It‘s the bank’s fault for offering a service and the victim is the person that uses the credit card to buy things they can’t afford. There always has to be a victim…
Report Post »drybackinpi
Posted on September 30, 2011 at 7:20am“More to help community”, translation: More free handouts to worthless blacks.
Report Post »Wolfpack Conservative
Posted on September 30, 2011 at 7:20amIf you don’t give out “risky” credit cards, how are people supposed to get started? It’s their company, let them run it Jesse
Report Post »JACKTHETOAD
Posted on September 30, 2011 at 7:08amAlmost forgot. Remember the photo of the bug-eyed preacher and his two goons ‘giving their blessings’ to the Wisconsin fleebagger during the union protests there? (I saw it on Fox. It was ridiculously hilarious.) The Holy Church Of Thuggery, where donations are always accepted.
Report Post »JACKTHETOAD
Posted on September 30, 2011 at 7:00amHold on to your wallets, Rev. Shakedown’s on the loose again. I think Capitol One needs to have Alec Baldwin rub some cream on the inside of Jackson’s thighs to calm him down. He disgraces the term reverend.
Report Post »FREDD The WILSON
Posted on September 30, 2011 at 7:51amJesse Jackson does more to advance racism than any other “leader” in America. Oh I forgot about Cynthia and Shelia. Never mind..
Report Post »