UPDATE:OCC Allows More Time For Comment On Capital One's HSBC Plan

A U.S. federal bank regulator Monday announced it is giving the public more time to weigh in on Capital One Financial Corp.'s (COF) plans to buy HSBC Holdings PLC's (HBC, HSBA.LN, 0005.HK) credit card business.

In a notice, the Office of the Comptroller of the Currency said it will now accept public comments through Dec. 19. Initially, the OCC closed the comment period on Oct. 21.

The OCC has yet to decide whether or not it will hold public hearings on the proposal.

"That is something we'll consider after the comment period," said an OCC spokesman.

Earlier this month, a coalition of more than a dozen consumer, housing and civil rights groups announced their opposition to Capital One's planned acquisition and urged the OCC to extend the comment period by two months.

"It would be a mistake for the regulators to rubber stamp Capital One's acquisition of HSBC's credit card unit, given the monoline and risky nature of their credit card business," said National Community Reinvestment Coalition President John Taylor. "This acquisition poses a threat to taxpayers, and raises serious antitrust and systemic risk concerns."

The coalition also asked the OCC to hold formal hearings in five major cities, to allow input from stakeholders in various regions of the country. It also argued that the OCC should allow time to review credit-card complaints from the Consumer Financial Protection Bureau, a new consumer watchdog agency that recently started gathering complaints from consumers.

"It's really significant that they are extending the comment period," said a spokesman for the National Community Reinvestment Coalition, which on Monday applauded the OCC's move. "It's very rare for them to do that."

Capital One has steadily defended its proposal but it also welcomed the extension.

"We appreciate the OCC providing an additional opportunity for any interested parties to express their views," a Capital One spokeswoman said in a statement. "Our history clearly demonstrates that our customers and local communities will see numerous benefits from this acquisition."

In addition to its plans to buy HSBC's credit card portfolio, Capital One is planning to purchase ING Direct USA, the U.S. online-banking business owned by ING Groep (ING, INGA.AE). The $9 billion ING deal, announced in June, would make Capital One the fifth-largest bank in the nation, based on deposits.

While the OCC is considering Capital One's plans to acquire HSBC's domestic credit card business, the Federal Reserve is in charge of reviewing the ING deal.

Like the OCC, the Federal Reserve in August decided to give the public more time to comment on Capital One's plans, a move that came amid a chorus of complaints and questions. In addition, the Fed held three meetings to collect more information on the bank's proposal; the final hearing was held in San Francisco Oct. 5.

Opponents to the acquisitions criticize Capital One's focus on credit cards, arguing that the bank's credit card lending practices are so risky that the firm isn't worthy of an expansion.

Meanwhile, Capital One has promised to invest billions of dollars in low and moderate-income communities and to add hundreds of jobs in Delaware and South Dakota.

-By Maya Jackson Randall, Dow Jones Newswires; 202-862-6687; [e-mail]