In testimony provided to the Federal Reserve Board of Governors on Wednesday, National Committee for Responsive Philanthropy executive director Aaron Dorfman questioned Capital One's acquisition of the ING Direct online banking service, the Associated Press reports.
Under the 2010 Dodd-Frank Wall Street Reform Act, a bank acquiring another bank must provide a benefit to the public that outweighs the adverse effects of the acquisition. In testimony before the Federal Reserve in Chicago last month, Capital One, which has pledged to commit $450 million over ten years to charitable causes if the acquisition is approved, made philanthropy a centerpiece of its argument that the acquisition would produce significant public benefit and outlined aspects of its commitment.
But after assessing Capital One's philanthropic track record, NCRP concluded that the bank's giving is much lower than that of other large banks and argued that it might not fulfill its pledge. In 2009, for example, Capital One's annual giving represented 0.024 percent of its revenue, compared to median annual giving by other U.S. financial institutions of 0.11 percent. NCRP also found that even as Capital One was acquiring other institutions at a rapid clip from 2005-09, it gave an average of less than $5 million to charitable causes annually and reduced its giving each year during that period. "Capital One's philanthropic track record is dismal," said Dorfman. "I have serious reservations that Capital One will actually keep its promise to give back to the community after the merger."
In response, Capital One spokeswoman Tatiana Stead said in a statement that the figures provided by NCRP were inaccurate and only took into account the giving of the Capital One Foundation. "In 2011 alone, our giving totals are more than six times greater ($30 million) than the number given by NCRP," Stead told the AP. "The information and the data in the NCRP's testimony are incorrect and do not come close to representing our philanthropic giving numbers — which are actually significantly higher."