Capital One 2009 Annual Report Download - page 7

our competitors to pull back and reinvent their businesses. The new rules will drive pricing back to
primary terms, such as APRs and annual fees, placing a premium on up-front underwriting – which
plays to our strengths.
While the CARD Act will still have a substantial financial impact on Capital One, the choices we made
long ago will make our economic adjustment to the CARD Act manageable. Our credit card business
model remains largely intact, and we believe it will continue to deliver healthy revenue margins and
returns. Additionally, our multi-year initiative to revamp our card infrastructure and business processes
(completed in 2006) has proven instrumental in driving innovation and speed-to-market, and has
given us the flexibility to make the monumental operational changes required under the CARD Act.
A decade ago, Capital One was a capital-markets funded, undiversified specialty lender. Today we
are a deposit funded, broadly diversified bank with leading national lending businesses in credit
cards and auto finance, and competitive local scale positions in some of the best local banking
markets in the United States. And throughout the ultimate stress test – the Great Recession –
Capital One has proven to be among the strongest and most resilient banks, and is emerging with
an enhanced reputation with investors, regulators, and customers.
We Are Helping Our Customers And Communities
Through The Recession
The recession has taken an enormous toll on everyone – our customers, our families, our communities,
and our nation. The recession primarily resulted from excesses in the mortgage industry and a meltdown
of the capital markets. The everyday practices of typical regional banks – taking deposits, opening
savings accounts, helping parents finance their children’s education, providing credit cards and auto
loans, and making it possible for small business owners to expand – had little role in the economic
collapse. These activities are at the core of what we do, and they are critical to the economic recovery.
While these are difficult times, this is not the moment to retreat. Every bank needs to do what it can to help
customers and communities get back on their feet. Capital One is taking responsibility for doing just that.
We are working with customers who are struggling to help them pay their bills. Where possible,
we are helping home loan customers modify their mortgages and stay in their homes. And we are
extending billions of dollars’ worth of credit to creditworthy borrowers. For example, we have made
over $8 billion of new commitments and renewals of existing commitments to middle market and
small business customers. We have originated over $12 billion in auto and credit card loans, providing
consumers with liquidity at a time when it was often hard to find. And we have made over $900 million
of community development loans and investments, primarily for affordable housing.
We also are helping low- and moderate-income residents take charge of their financial futures.
By partnering with local nonprofits and civic leaders, we are taking mainstream banking into
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