Capital One offered a defense to Congress on Tuesday, September 20, of its proposed merger with ING Direct USA, according to The New York Times.
ING has been looking to sell its American branch for months as the company attempts to meet requirements placed upon it by the bailout it received from the Dutch government.
Capital One agreed to buy the bank in June for $9 billion in stock and cash, but the Federal Reserve and Congress quickly raised concerns about the potential for the deal to create another "too-big-to-fail" bank. One industry group, Independent Community Bankers of America, asked the Fed to place a moratorium on any acquisitions including major banks.
Capital One and ING, however, contend that the merger offers a strong, profitable bank with a diverse portfolio of services.
"The acquisition of ING Direct will further reduce, rather than increase, any risk to the financial system," John G. Finneran, Capital One's general counsel, told the Fed, according to the Times.
Reuters reports that the current investigation comes at the behest of U.S. Representative Barney Frank, one of the two legislators most responsible for last year's banking reform bill.