) -- For

Capital One

(COF) - Get Capital One Financial Corporation Report

shareholders, the stakes couldn't be higher.

After an outcry from consumer groups, Rep. Barney Frank (D., Mass.), the senior Democrat on the House Financial Services Committee, requested that the

Federal Reserve

extend the public comment period

preceding approval of Capital One's deal to acquire

ING Direct


ING Groep

(ING) - Get ING Groep NV Sponsored ADR Report


The Fed on Friday announced that the comment period would be extended until Oct. 12 and include public hearings.

For Capital One's shareholders, this could be a brutal 47 days as the company has alreadypriced a $2 billion offering of common shares at $50 a share, to partially finance the $9 billion ING Direct acquisition. The common offering will close only if the ING deal is completed.

Capital One's subsequent deal to pay a premium of $2.6 billion to acquire



$30 billion U.S. credit card portfolio is expected to be completed in the second quarter of 2012, and will rely heavily on Capital One's increased liquidity from the ING Direct deal, which was originally expected to be completed in late 2011 or early 2012.

In asking for the Federal Reserve to extend its comment period before deciding whether to approve the Capital One acquisition of ING Direct, Frank was concerned that "this proposed purchase would create the fifth-largest bank in the United States,"



The Federal Reserve has scheduled public meetings on Capital One's ING Direct deal, including a meeting in Washington, D.C. on Sept. 20 at a location to be determined, followed by a Sept. 27 meeting at the Federal Reserve Bank of Chicago and an Oct. 5 meeting at the Federal Reserve Bank of San Francisco.

The Fed said the purpose of the meetings was to help the regulator "determine whether the acquisition can be expected to produce benefits to the public" that will "outweigh possible adverse effects," which include "decreased or unfair competition, conflicts of interest, unsound banking practices and risks to the U.S. banking or financial system."

The Fed also said it would review Capital One's "financial and managerial resources" and the performance of Capital One and ING Direct "under the Community Reinvestment Act."

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The regulator didn't say whether the concerns of Capital One's shareholders would play any role in its evaluation of the merger agreement.

Capital One said in a statement that benefits from the ING Direct acquisition "to our customers, communities and the economy will be significant," and pointed out that the combined company would "remain a traditional bank with only 1.5 percent of deposits nationwide and none of the complexity" that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 addressed in its attempt to extirpate the assumption that some banks were "too big to fail."

The McLean, Va.-baesd lender went on to say that in prior acquisitions, the company had "substantially increased our investments that serve lower income communities," and that its "record includes scores of letters of support from community groups."

Capital One ended with the argument that it was "actually adding thousands of jobs to

the economy at a time when many financial services companies are announcing sizable reductions."

The company has had a stellar track record for posting solid earnings right through the credit crisis, as has its archcompetitors

American Express

(AXP) - Get American Express Company Report


Discover Financial Services

(DFS) - Get Discover Financial Services Report

, with credit cards emerging as

the most profitable area for domestic banks

in the current slow-growth environment.


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Written by Philip van Doorn in Jupiter, Fla.

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Philip van Doorn


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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.