Capital One 2011 Annual Report Download - page 24

SUPERVISION AND REGULATION
General
Capital One Financial Corporation is a bank holding company (“BHC”) under Section 3 of the Bank Holding
Company Act of 1956, as amended (12 U.S.C. § 1842) (the “BHC Act”) and is subject to the requirements of the
BHC Act, including its capital adequacy standards and limitations on our nonbanking activities. We are also
subject to supervision, examination and regulation by the Board of Governors of the Federal Reserve System (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, we are expected to act as a source of
financial and managerial strength to any banks that we control, including the Banks and ING Bank, and to
commit resources to support them.
On May 27, 2005, we 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 nonbank 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 and dealing 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.
Our election to become a financial holding company under the GLBA certifies that the depository institutions we
control meet certain criteria, including capital, management and Community Reinvestment Act (“CRA”)
requirements. Effective July 21, 2011, under amendments to the BHC Act enacted under the Dodd-Frank Wall
Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), Capital One Financial Corporation also
must be “well capitalized” and “well managed.” If we were to fail to continue to meet the criteria for financial
holding company status, we could, depending on which requirements we failed to meet, face restrictions on new
financial activities or acquisitions or be required to discontinue existing activities that are not generally
permissible for bank holding companies.
The Banks are national associations chartered under the laws of the United States, the deposits of which are
insured by the Deposit Insurance Fund (the “DIF”) of the Federal Deposit Insurance Corporation (the “FDIC”)
up to applicable limits. ING Bank is a federal savings bank chartered under the laws of the United States, the
deposits of which are also insured by the DIF. In addition to regulatory requirements imposed as a result of
COBNA’s international operations (discussed below), the Banks and ING Bank are subject to comprehensive
regulation and periodic examination by the Office of the Comptroller of the Currency (“OCC”), the FDIC and,
effective July 21, 2011, by the Consumer Financial Protection Bureau (the “CFPB”).
We are also registered as a financial institution holding company under Virginia law and, as such, we are subject
to periodic examination by Virginia’s Bureau of Financial Institutions. We also face regulation in the
international jurisdictions in which we conduct business (see below under “Regulation of International Business
by Non–U.S. Authorities”).
Regulation of Business Activities
The activities of the Banks and ING Bank as consumer lenders also are subject to regulation under various
federal laws, including the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting
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