Fed approves sale of ING Direct to Capital One

Federal regulators unanimously approved Capital One's proposed purchase of ING Direct, one of North America's first successful online savings banks. According to news reports, the merger prompted lawmakers and consumer advocates to debate the merits of approving the creation of a new megabank. During a public comment period lasting almost eight months, the deal's critics called upon Capital One to pledge increased commitments to low income communities while maintaining jobs for current employees.

Without government approval, regulators in Europe would have forced ING's parent company to sell the online bank to one of Capital One's competitors. Industry analysts have suggested that GE Capital and Ally Bank both had expressed interest in purchasing ING's North American assets and operations. The Federal Reserve Board addressed critics by stating that the deal's benefits "would outweigh any likely adverse effects" to individual communities or to the overall economy.

ING Direct sale just one part of global company overhaul

ING's sale of its online savings bank represents just one part of the government-mandated restructuring company leaders launched in late 2010. After withdrawing from the American retail banking market, the company plans to spin off its U.S. insurance and investment management business through an initial public offering. CEO Jan Hommen called off plans for a similar IPO of its Asian operations, citing uncertain economic conditions.

Meanwhile, Capital One and ING Direct spokespeople have taken to social networks to assure customers that the pending merger won't affect either bank's daily operations or customer service. Analysts commenting on the deal for the Wall Street Journal and for CNBC pointed out the lack of overlap between the two companies. According to WSJ reports, Capital One intends to use ING Direct's cash to help finance a takeover of HSBC's American credit card business, including the Household Bank brand.

Capital One operates a handful of retail bank branches, while focusing its efforts on its credit card, auto loan and home loan products. ING Direct has long used its online savings accounts to fund discount mortgage deals, winning praise for a low-risk approach that shielded it from the worst effects of the American mortgage crisis. Capital One CEO Richard Fairbank had previously told investors to expect the purchase to close "within days" of Fed approval.