Capital One to buy ING Online.. So Long ING?
Posted: June 18th, 2011 | Author: Joe | Filed under: Banking | Tags: Banking, Banks, Capital One, ING, ING Direct, news, online banking | 3 Comments »Long time readers of this blog know that ING and I go way back. I became a loyal customer of theirs back in 2004. I’ve shared countless referrals to new customers for a free $25 bonus since this site began, but here’s something that has me rethinking that relationship with ING Direct.
To be honest, I’ve been a little wary since 2008, when ING received a bailout from the eurozone.
Truth be told, I haven’t actually seen any downside to that bailout as a customer, but it seems that one of the conditions of that bailout was that ING sell its U.S. online banking division. I won’t pretend that this condition makes any sense, since it seems a profitable arm of the conglomerate and it was likely the mortgage division, marketing no money down, interest only ARMs that got them in trouble in the first place. The problem is that Capital One looks set to acquire the ING Direct operation.
I’ve had a credit card with Capital One since the dawn of time, or very nearly. I have to say I haven’t had a problem with them in that capacity (certainly not as much as I have had with BofA), but I can’t get past the feeling that the famously simple and straightforward ING savings account is going to become bloated with 27 pages of fine-print disclaimers and hidden fees. Time will tell, and I plan on canceling my accounts at the 1st sign of such a downturn in service.
On the flip-side, this is probably great news for shareholders:
“Following the acquisition, Capital One — a McLean, Virginia-based bank which is best known for its credit card unit — will leapfrog two places up the rankings of the largest U.S. banks to become the nation’s seventh-largest bank by assets, according to SNL Financial, a financial services data firm.”
But isn’t this backwards? Where’s all that regulation we’ve heard touted by the administration? Shouldn’t banks be getting smaller, not bigger? After all, the mortgage-based banking fiasco at the heart of the 2008 meltdown became as big as it was in part due to those toxic mortgages being concentrated in relatively few, very large banks.
The banking system should either be a much larger network of smaller banks, to diversify the risk of failure or maybe we should have 2 different kinds of banks: simple, traditional banks (offering fixed rate mortgages, car loans, checking, savings accounts, CDs, etc..) and very large investment banks specializing in credit default swaps, toxic mortgages and other risky, black arts kinds of investments.
I don’t know. I’m no expert, and maybe that just makes too much common sense to ever be enacted.
I too have been a big fan of ing and hope it will not become over generic and fee based I will also pull out if they start messing with ing model. I also have ing Sharebuilder do you know if this will be affected. thanks dawn I didnt check box for followup but I would like to recieve feedback if you have any
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