capital-one-purchase-of-hsbc-delayed

A hotly anticipated credit card acquisition just got a little cooling-off period thanks to a consumer watchdog group and a U.S. regulator's ruling. Capital One's hoped-for purchase of HSBC Holdings' U.S. credit card division has been put on hold as the Office of the Comptroller of the Currency reopens the comment period regarding the merger, according to a story by Bloomberg News.

The deal for the Virginia-based Capital One to buy the U.S. credit card holdings of London-based HSBC was first announced in August of this year. Under the original terms, Capital One would gain the company's Orchard Bank, Household Bank and HSBC credit card customers--a $30-billion portfolio that includes private-label and retail store credit cards--for a $2.6-billion premium.


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The comment period originally ended on Nov. 7, but the National Community Reinvestment Coalition and 18 other groups asked the OCC to delay its decision and reopen the comment period, which would give those opposed to the merger more opportunity to present their reservations.

In a letter the groups sent to the OCC, they also asked that the agency hold public hearings regarding the merger. The chief concern, according to a story by Reuters, is that by acquiring HSBC's credit cards, Capital One will become more of a single-focused business that could jeopardize economic stability as it could increase the size of Capital One to a bank that is "too big to fail."

Capital One issued a statement via email from its spokeswoman, Tatiana Snead, who said "We appreciate the OCC providing an additional opportunity for any interested parties to express their views."

The public comment period is now open until Dec. 19. Comments can be submitted by email to OCCPublicCommentsMailbox@occ.treas.gov or by fax to 202-874-5665. No timeline has been announced for when the OCC, which is part of the U.S. Treasury, will make its decision regarding the proposed merger.