Capital One 2009 Annual Report Download - page 26

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Non-Bank Activities
The Company’s non-bank subsidiaries are subject to supervision and regulation by various other federal and state authorities.
Insurance agency subsidiaries are regulated by state insurance regulatory agencies in the states in which they operate. Capital One
Agency LLC is a licensed insurance agency that is regulated by the New York State Insurance Department in its home state and by the
state insurance regulatory agencies in the states in which it operates. Capital One Agency LLC provides both personal and business
insurance services to retail and commercial clients. Chevy Chase Insurance Agency, Inc. is a licensed insurance agency that is
regulated by the Maryland State Insurance Administration in its home state and by the state insurance regulatory agencies in the states
in which it operates. The Company plans to merge Chevy Chase Insurance Agency, Inc. with and into Capital One Agency LLC in
2010.
Capital One Investment Services LLC, Capital One Southcoast Capital, Inc., and Chevy Chase Securities, Inc. are registered broker-
dealers regulated by the Securities and Exchange Commission and the Financial Industry Regulatory Authority. The Company’s
broker-dealer subsidiaries are subject to, among other things, net capital rules designed to measure the general financial condition and
liquidity of a broker-dealer. Under these rules, broker-dealers are required to maintain the minimum net capital deemed necessary to
meet their continuing commitments to customers and others, and are required to keep a substantial portion of their assets in relatively
liquid form. These rules also limit the ability of broker-dealers to transfer large amounts of capital to parent companies and other
affiliates. Broker-dealers are also subject to other regulations covering their business operations, including sales and trading practices,
public offerings, publication of research reports, use and safekeeping of client funds and securities, capital structure, record-keeping
and the conduct of directors, officers and employees. The Company plans to merge Chevy Chase Securities, Inc. with and into Capital
One Investment Services LLC in 2010.
Capital One Asset Management LLC, Capital One Financial Advisors LLC and Chevy Chase Securities, Inc. are registered investment
advisers regulated under the Investment Advisers Act of 1940. Capital One Asset Management provides investment advice to
institutions, foundations and endowments, and high net worth individuals. Chevy Chase Securities, Inc. provides investment advice to
institutions, foundations and endowments, and high net worth individuals, as well as being a registered broker-dealer as described
above. The Company plans to transfer the investment advisory services and licenses associated with Chevy Chase Securities, Inc. to
Capital One Financial Advisors, LLC in 2010.
USA PATRIOT Act of 2001
The USA PATRIOT Act of 2001 (the “Patriot Act”) contains sweeping anti-money laundering and financial transparency laws as well
as enhanced information collection tools and enforcement mechanisms for the U.S. government, including due diligence requirements
for private banking and correspondent accounts; standards for verifying customer identification at account opening; rules to promote
cooperation among financial institutions, regulators, and law enforcement in identifying parties that may be involved in terrorism or
money laundering; reporting requirements applicable to the receipt of coins and currency of more than $10,000 in nonfinancial trades
or businesses; and more broadly applicable suspicious activity reporting requirements.
The Department of Treasury in consultation with the Federal Reserve and other federal financial institution regulators has
promulgated rules and regulations implementing the Patriot Act that prohibit correspondent accounts for foreign shell banks at U.S.
financial institutions; require financial institutions to maintain certain records relating to correspondent accounts for foreign banks;
require financial institutions to produce certain records upon request of the appropriate federal banking agency; require due diligence
with respect to private banking and correspondent banking accounts; facilitate information sharing between government and financial
institutions; require verification of customer identification; and require financial institutions to have an anti-money laundering
program in place.
Interstate Taxation
Several states have passed legislation which attempts to tax the income from interstate financial activities, including credit cards,
derived from accounts held by local state residents. The Company has accounted for this matter applying the recognition and
measurement criteria of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB
Statement No. 109, (“ASC 740-10/FIN 48”).