Capital One 2007 Annual Report Download - page 30

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Intellectual Property
As part of our overall and ongoing strategy to protect and enhance our intellectual property, we rely on a variety of protections,
including copyrights, trademarks, trade secrets, patents and certain restrictions on disclosure and competition. We also undertake other
measures to control access to and distribution of our other proprietary information. Despite these precautions, it may be possible for a
third party to copy or otherwise obtain and use certain intellectual property or proprietary information without authorization. Our
precautions may not prevent misappropriation or infringement of our intellectual property or proprietary information. In addition, our
competitors also file patent applications for innovations that are used in our industry. The ability of our competitors to obtain such
patents may adversely affect our ability to compete. Conversely, our ability to obtain such patents may increase our competitive
advantage. There can be no assurance that we will be successful in such efforts, or that the ability of our competitors to obtain such
patents may not adversely impact our financial results.
Employees
As of December 31, 2007, we employed approximately 27,000 employees whom we refer to as associates. A central part of our
philosophy is to attract and maintain a highly capable staff. We view current associate relations to be satisfactory. None of our
associates is covered under a collective bargaining agreement.
Supervision and Regulation
General
The Corporation is a bank holding company (BHC) under Section 3 of the Bank Holding Company Act of 1956, as amended (the
BHC Act) (12 U.S.C. § 1842). The Corporation is subject to the requirements of the BHC Act, including its capital adequacy
standards and limitations on the Corporations nonbanking activities, and to supervision, examination and regulation by the Federal
Reserve Board (the Federal Reserve). Permissible activities for a BHC include those activities that are so closely related to banking
as to be a proper incident thereto such as consumer lending and other activities that have been approved by the Federal Reserve by
regulation or order. Certain servicing activities are also permissible for a BHC if conducted for or on behalf of the BHC or any of its
affiliates. Impermissible activities for BHCs include activities that are related to commerce such as retail sales of nonfinancial
products. Under Federal Reserve policy, the Corporation is expected to act as a source of financial and managerial strength to any
banks that it controls, including COB, CONA, and Superior (the Banks), and to commit resources to support them.
On May 27, 2005, the Corporation became a financial holding company under the Gramm-Leach-Bliley Act amendments to the
BHC Act (the GLBA). The GLBA removed many of the restrictions on the activities of BHCs that become financial holding
companies. A financial holding company, and the non-bank companies under its control, are permitted to engage in activities
considered financial in nature (including, for example, insurance underwriting, agency sales and brokerage, securities underwriting,
dealing and brokerage and merchant banking activities); incidental to financial activities; or complementary to financial activities if
the Federal Reserve determines that they pose no risk to the safety or soundness of depository institutions or the financial system in
general.
The Corporations election to become a financial holding company under the GLBA certifies that the depository institutions the
Corporation controls meet certain criteria, including capital, management and Community Reinvestment Act requirements. If the
Corporation were to fail to continue to meet the criteria for financial holding company status, it could, depending on which
requirements it failed to meet, face restrictions on new financial activities or acquisitions and/or be required to discontinue existing
activities that are not generally permissible for bank holding companies.
COB is a banking corporation chartered under Virginia law and a member of the Federal Reserve System, the deposits of which are
insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (the FDIC) up to applicable limits. In addition
to regulatory requirements imposed as a result of COBs international operations (discussed below), COB is subject to comprehensive
regulation and periodic examination by the Bureau of Financial Institutions of the Virginia State Corporation Commission (the
Bureau of Financial Institutions), the Federal Reserve, the Federal Reserve Bank of Richmond (FRB-R) and the FDIC. The
Corporation plans to convert COB to a national association in the first quarter of 2008. The new name of COB will be Capital One
Bank (USA), National Association. As a national association, COB will be regulated primarily by the OCC and its deposits will
continue to be insured by the Deposit Insurance Fund of the FDIC up to applicable limits. For further discussion regarding OCC
regulation, Item 1 FFIEC Account Management Guidance.
CONA is a national association, the deposits of which are insured by the Deposit Insurance Fund of the FDIC up to applicable limits.
On January 1, 2008, COAF, which engages in automobile financing activities, became a wholly owned subsidiary of CONA. In
connection with the COAF reorganization, which included the transfer of approximately $10 billion in assets, certain COAF
subsidiaries, holding approximately $14 billion in assets, remain subsidiaries of COFC.
Superior is a national association, the deposits of which are insured by the Deposit Insurance Fund of the FDIC up to applicable limits.
Subject to receipt of all required approvals, the Corporation plans to merge Superior with and into CONA in the first quarter of 2008.