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Capital One Financial Corporation is an American
bank holding company A bank holding company is a company that controls one or more banks, but does not necessarily engage in banking itself. The compound bancorp (''banc''/''bank'' + '' corp ration') is often used to refer to these companies as well. United States ...
specializing in
credit cards A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
,
auto loan Auto may refer to: * An automaton * An automobile * An autonomous car * An automatic transmission * An auto rickshaw * Short for automatic * Auto (art), a form of Portuguese dramatic play * ''Auto'' (film), 2007 Tamil comedy film * Auto (play), ...
s, banking, and
savings account A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transa ...
s, headquartered in
McLean, Virginia McLean ( ) is an unincorporated community and census-designated place (CDP) in Fairfax County in Northern Virginia. McLean is home to many diplomats, military, members of Congress, and high-ranking government officials partially due to its proxim ...
with operations primarily in the United States. It is on the
list of largest banks in the United States The following table lists the 100 largest bank holding companies in the United States ranked by total assets of June 30, 2022 per the Federal Financial Institutions Examination Council; their market capitalization is also shown. This list does not ...
and has developed a reputation for being a technology-focused bank. The bank has 755 branches including 30 café style locations and 2,000 ATMs. It is ranked 99th on the
Fortune 500 The ''Fortune'' 500 is an annual list compiled and published by ''Fortune'' magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years. The list includes publicly held companies, along ...
, 9th on Fortune's 100 Best Companies to Work For list, and conducts business in the United States, Canada, and the United Kingdom. The company helped pioneer the mass marketing of credit cards in the 1990s. In 2016, it was the 5th largest credit card issuer by purchase volume, after
American Express American Express Company (Amex) is an American multinational corporation specialized in payment card services headquartered at 200 Vesey Street in the Battery Park City neighborhood of Lower Manhattan in New York City. The company was found ...
,
JPMorgan Chase JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the ...
,
Bank of America The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...
, and
Citigroup Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
. With a market share of 5%, Capital One is also the second largest auto finance company in the United States, following
Ally Financial Ally Financial is a bank holding company organized in Delaware and headquartered in Detroit, Michigan. The company provides financial services including car finance, online banking via a direct bank, corporate lending, vehicle insurance, mor ...
. The company's three divisions are credit cards, consumer banking and commercial banking. In the fourth quarter of 2018, 75% of the company's revenues were from credit cards, 14% were from consumer banking, and 11% were from commercial banking.


History


Monoline credit card company (1994–2004)

On July 21, 1994,
Richmond, Virginia (Thus do we reach the stars) , image_map = , mapsize = 250 px , map_caption = Location within Virginia , pushpin_map = Virginia#USA , pushpin_label = Richmond , pushpin_m ...
-based Signet Financial Corp (now part of Wells Fargo) announced the
corporate spin-off A corporate spin-off, also known as a spin-out, or starburst or hive-off, is a type of corporate action where a company "splits off" a section as a separate business or creates a second incarnation, even if the first is still active. Characte ...
of its credit card division, OakStone Financial, naming
Richard Fairbank Richard Dana Fairbank (born September 18, 1950) is an American billionaire businessman who founded Capital One with Nigel Morris in 1988. He previously served on the board of directors of MasterCard International from 2004 through 2006. He is ...
as CEO. Signet renamed the subsidiary Capital One in October 1994, and the spin-off was completed in February 1995. At that time, Capital One was a ''monoline'' bank, meaning that all of its revenue came from a single product, in this case, credit cards. This strategy is risky in that it can lead to losses during bad times. Capital One attributed its relative success as a monoline to its use of data collection to build
demographic profile Demographic profiling is a form of demographic analysis used by marketers so that they may be as efficient as possible with advertising products or services and identifying any possible gaps in their marketing strategy. Demographic profiling can e ...
s, allowing it to target personalized offers of credit directly to consumers.


Expansion into auto loans (1996–present)

In 1996, Capital One moved from relying on teaser rates to generate new clients to adopting more innovative techniques that would attract more customers to their business model. At the time, it was losing customers to competitors who offered higher ceilings on loan balances and no-annual-fee accounts. The company came up with co-branded, secured, and joint account credit cards. In mid-1996, Capital One received approval from the federal government to set up Capital One FSB. This meant that the company could now retain and lend out deposits on secured cards and even issue automobile installment loans. In 1996, Capital One expanded its business operations to the United Kingdom and Canada. This gave the company access to a large international market for its credit cards. An article appearing in ''Chief Executive'' in 1997 noted that the company held $12.6 billion in credit card receivables and served more than nine million customers. The company was listed in the Standard & Poor's 500, and its stock price hit the $100 mark for the first time in 1998. In July 1998, Capital One acquired auto financing company Summit Acceptance Corporation. In 1999, Capital One was looking to expand beyond credit cards. CEO Richard Fairbank announced moves to use Capital One's experience with collecting consumer data to offer loans, insurance, and phone service. In October 2001, PeopleFirst Finance LLC was acquired by Capital One. The companies were combined and re-branded as Capital One Auto Finance Corporation in 2003. In late 2002, Capital One and the
United States Postal Service The United States Postal Service (USPS), also known as the Post Office, U.S. Mail, or Postal Service, is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the U ...
proposed a negotiated services agreement (NSA) for bulk discounts in mailing services. The resulting three-year agreement was extended in 2006. In June 2008, however, Capital One filed a complaint with the USPS regarding the terms of the next agreement, citing the terms of the NSA of Capital One's competitor,
Bank of America The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...
. Capital One subsequently withdrew its complaint to the
Postal Regulatory Commission The United States Postal Regulatory Commission (or PRC), formerly called the Postal Rate Commission, is an independent regulatory agency created by the Postal Reorganization Act of 1970. Like the Postal Service, it was defined in law as an indep ...
following a settlement with the USPS. Automobile loan financer Onyx Acceptance Corporation was acquired by Capital One in January 2005.


Expansion into retail banking (2005–present)

In 2005 Capital One became the first monoline credit card issuer to buy a bank, as it entered into retail banking by acquiring
Hibernia National Bank Hibernia National Bank was a bank headquartered in New Orleans, Louisiana. The bank was the primary subsidiary of Hibernia Corporation, a bank holding company. In November 2005, the bank was acquired by Capital One. Hibernia is the classical ...
. It purchased the
New Orleans, Louisiana New Orleans ( , ,New Orleans
Merriam-Webster.
; french: La Nouvelle-Orléans , es, Nuev ...
-based Hibernia for $4.9 billion in cash and stock. It acquired
Melville, New York Melville is an affluent hamlet and census-designated place (CDP) in the Town of Huntington in Suffolk County on Long Island, New York. The population was 19,284 at the 2020 census. History The area was known to the Native Americans as ''Sun ...
-based
North Fork Bank North Fork Bank was an American bank that operated from 1950 until 2008 when it became Capital One Bank (after the name of its new parent). In November 2007, it had 365 branches in the New York metropolitan area. History North Fork early histor ...
for $13.2 billion in cash and stock in 2006. The acquisition of retail banks greatly reduced its dependency on the credit-card business alone. It acquired Netspend, a marketer of prepaid debit cards, for $700 million in 2007. During the 2007 subprime mortgage financial crisis, Capital One closed its mortgage platform, GreenPoint Mortgage, due in part to investor pressures. The
U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
criticized Capital One's conduct during the crisis, claiming that they understated auto loan losses during the
financial crisis of 2007–2008 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...
. In 2013, Capital One paid $3.5 million to settle the case, but was not required to directly address the allegations of wrongdoing. In 2008, Capital One received an investment of $3.56 billion from the
United States Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...
as a result of the
Troubled Asset Relief Program The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector that was passed by Congress and signed into law by President G ...
. On June 17, 2009, Capital One completed the repurchase of the stock the company issued to the
U.S. Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...
paying a total of $3.67 billion, resulting in a profit of over $100 million to the U.S. Treasury. In February 2009, Capital One acquired
Chevy Chase Bank Chevy Chase Bank, F.S.B. was the largest locally based banking company in the Washington Metropolitan Area. It was acquired by Capital One in February 2009, and rebranded as Capital One Bank in September 2010. Despite its name, Chevy Chase Ban ...
for $520 million in cash and stock. In January 2011, Capital One acquired Canada-based
Hudson's Bay Company The Hudson's Bay Company (HBC; french: Compagnie de la Baie d'Hudson) is a Canadian retail business group. A fur trading business for much of its existence, HBC now owns and operates retail stores in Canada. The company's namesake business div ...
's private credit card portfolio from Synchrony Financial, then known as GE Financial. In June 2011,
ING Group The ING Group ( nl, ING Groep) is a Dutch multinational banking and financial services corporation headquartered in Amsterdam. Its primary businesses are retail banking, direct banking, commercial banking, investment banking, wholesale bankin ...
announced the sale of its ING Direct division to Capital One for $9 billion in cash and stock. On August 26, 2011, the
Federal Reserve Board of Governors The Board of Governors of the Federal Reserve System, commonly known as the Federal Reserve Board, is the main governing body of the Federal Reserve System. It is charged with overseeing the Federal Reserve Banks and with helping implement the mon ...
announced it would hold public hearings on the Capital One acquisition of ING Direct, and extend to October 12, 2011, the public comment period that had been scheduled to end August 22. The move came amidst rising scrutiny of the deal on systemic risk, or "Too-Big-to-Fail," performance under the
Community Reinvestment Act The Community Reinvestment Act (CRA, P.L. 95-128, 91 Stat. 1147, title VIII of the Housing and Community Development Act of 1977, ''et seq.'') is a United States federal law designed to encourage commercial banks and savings associations to hel ...
, and pending legal challenges. A coalition of national civil rights and consumer groups, led by the National Community Reinvestment Coalition, were joined by Rep.
Barney Frank Barnett Frank (born March 31, 1940) is a former American politician. He served as a member of the U.S. House of Representatives from Massachusetts from 1981 to 2013. A Democrat, Frank served as chairman of the House Financial Services Committee ...
to challenge immediate approval of the deal. The groups argued that the acquisition was a test of the Dodd-Frank Wall Street Reform and Consumer Protection Act, under which systemically risky firms must demonstrate a public benefit that outweighs new risk before they are allowed to grow. Kansas City Federal Reserve Bank head Thomas M. Hoenig was also skeptical of the deal. In February 2012, the acquisition was approved by regulators and Capital One completed its acquisition of ING Direct. Capital One received permission to merge ING into its business in October 2012, and rebranded ING Direct as Capital One 360 in November 2012. In April 2011, Capital One signed a deal with
Kohl's Kohl's (stylized in all caps) is an American department store retail chain, operated by Kohl's Corporation. it is the largest department store chain in the United States, with 1,165 locations, operating stores in every U.S. state except Haw ...
to handle Kohl's private label credit card program that was previous serviced by
Chase Bank JPMorgan Chase Bank, N.A., doing business as Chase Bank or often as Chase, is an American national bank headquartered in New York City, that constitutes the consumer and commercial banking subsidiary of the U.S. multinational banking and fina ...
for a seven-year period for an undisclosed amount. The contract between the two companies was extended in May 2014. In August 2011, Capital One reached a deal with
HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tri ...
to acquire its U.S. credit card operations. Capital One paid $31.3 billion in exchange for $28.2 billion in loans and $600 million in other assets. The acquisition was completed in May 2012. The acquisition also included private issued credit cards for such companies as
Saks Fifth Avenue Saks Fifth Avenue (originally Saks & Company; Colloquialism, colloquially Saks) is an American Luxury goods, luxury department store chain headquartered in New York City and founded by Andrew Saks. The original store opened in the F Street and ...
,
Neiman Marcus Neiman Marcus Group, Inc. is an American integrated luxury retailer headquartered in Dallas, Texas, which owns Neiman Marcus, Bergdorf Goodman, Horchow, and Last Call. Since September 2021, NMG has been owned by a group of investment compani ...
, and
Lord & Taylor Lord & Taylor was the oldest brick and mortar department store in the United States, in business from 1826 to 2020. The brand was purchased during former owner Le Tote's 2020 liquidation bankruptcy and relaunched by new owner, Saadia Group, as ...
that were previously handled by HSBC. In February 2012, along with several other banks, Capital One announced support for the
Isis Mobile Wallet JVL Ventures, LLC d/b/a Softcard (formerly Isis Mobile Wallet), was a joint venture between AT&T, T-Mobile and Verizon which produced a mobile payments platform known as ''Softcard'', which used near-field communication (NFC) technology to allo ...
payment system. However, in September 2013, Capital One dropped support for the venture. In 2012, Capital One closed 41 branch locations. In February 2014, Capital One became a 25% owner in ClearXchange, a
Peer-to-peer transaction Peer-to-peer transactions (also referred to as person-to-person transactions, P2P transactions, or P2P payments) are electronic money transfers made from one person to another through an intermediary, typically referred to as a P2P payment applicat ...
money transfer service designed to make
electronic funds transfer Electronic funds transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of b ...
s to customers within the same bank and other financial institutions via mobile phone number or email address. ClearXchange was sold to Early Warning in 2016. In January 2015, Capital One acquired Level Money, a budgeting app for consumers. In 2015, Capital One closed several branch locations to leave 174 operating branches in the D.C. metro area. In July 2015, the company acquired Monsoon, a design studio, development shop, marketing house and strategic consultancy. In 2015, Capital One acquired
General Electric General Electric Company (GE) is an American multinational conglomerate founded in 1892, and incorporated in New York state and headquartered in Boston. The company operated in sectors including healthcare, aviation, power, renewable energ ...
's Healthcare Financial Services unit, which included $8.5 billion in loans made to businesses in the healthcare industry, for $9 billion. In October 2016, Capital One acquired
Paribus Paribus is an American company and creator of the price tracking app of the same name, which syncs with a user's email account to scan for receipts and negotiates with online companies to refund the difference if there is a price drop shortly a ...
, a price tracking service, for an undisclosed amount. In July 2019, Capital One signed a deal with
Walmart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...
to handle Walmart's private label and co-branded credit card programs that was previously serviced by Synchrony Financial. In November 2021, the company introduced Venture X, a travel rewards credit card, with a $395 annual fee.


Exit from mortgage banking (2006–2007 and 2011–2017)

In November 2017, President of Financial Services Sanjiv Yajnik announced that the mortgage market was too competitive in the low rate environment to make money in the business. The company exited the mortgage origination business on November 7, 2017, laying off 1,100 employees. This was the second closure; the first occurred on August 20, 2007, when GreenPoint Mortgage unit was closed. GreenPoint had been acquired December 2006 when Capital One paid $13.2 billion to North Fork Bancorp Inc. The re-emergence into the mortgage industry came in 2011 with the purchase of online bank ING Direct USA.


Other acquisitions

In May 2018, the company acquired Confyrm, a digital identity and fraud alert service. In November 2018, Capital One acquired Wikibuy, a shopping comparison app and browser extension from an Austin, Texas start-up business; Wikibuy has no connection with Wikipedia/Wikimedia.


Divisions

Capital One operates 3 divisions as follows: * Credit cards – Capital One issues credit cards in the United States, Canada, and the United Kingdom and is the 3rd largest credit card issuer, after
JPMorgan Chase JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the ...
and
Citigroup Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking ...
. As of December 31, 2018, Capital One had $107.350 billion in credit card loans outstanding in the United States and $9.011 billion of credit card loans outstanding in Canada and the United Kingdom, with credit cards representing 47.3% of total loans outstanding. * Consumer banking – Capital One offers banking services, including
checking account A transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account held at a bank or other financial institution. It is available to the ...
s, saving accounts, and money market accounts via its branches and
direct bank A direct bank (sometimes called a branch-less bank or virtual bank) is a bank that offers its services only via the Internet, email, and other electronic means, often including telephone, online chat, and mobile check deposit. A direct bank has no ...
as well as retail and auto loans. As of December 31, 2018, the company had $2.864 billion in retail loans outstanding and $56.341 billion in
car finance Car finance refers to the various financial products which allow someone to acquire a car, including car loans and leases. Car purchases The most common method of buying a car in the United States is borrowing the money and then paying it of ...
loans outstanding, representing 22.9% of total loans outstanding. * Commercial banking – As of December 31, 2018, Capital One had $70.333 billion in loans outstanding secured by commercial, multifamily, and industrial properties, representing 28.6% of total loans outstanding.


Sports marketing

From 2001 to 2014, Capital One was the principal sponsor of the
college football College football (french: Football universitaire) refers to gridiron football played by teams of student athletes. It was through college football play that American football rules first gained popularity in the United States. Unlike most ...
Florida Citrus Bowl, which was called the
Capital One Bowl The Citrus Bowl is an annual college football bowl game played at Camping World Stadium in Orlando, Florida. The bowl is operated by Florida Citrus Sports, a non-profit group that also organizes the Cheez-It Bowl and Florida Classic. The gam ...
from 2003 to 2014. It sponsored a mascot challenge every year, announcing the winner on the day of the Capital One Bowl. The name of the
bowl game In North America, a bowl game is one of a number of post-season college football games that are primarily played by teams belonging to the NCAA's Division I Football Bowl Subdivision (FBS). For most of its history, the Division I Bowl Subdivis ...
was changed in 2015 to the
Buffalo Wild Wings Buffalo Wild Wings (originally Buffalo Wild Wings & Weck, hence the nickname BDubs, or BW3) is an American casual dining restaurant and sports bar franchise in the United States, Canada, India, Mexico, Panama, Philippines, Saudi Arabia, and Unit ...
Citrus Bowl. Capital One is the title sponsor of the
Orange Bowl The Orange Bowl is an annual American college football bowl game played in the Miami metropolitan area. It has been played annually since January 1, 1935, making it, along with the Sugar Bowl and the Sun Bowl, the second-oldest bowl game ...
since 2015. Capital One Venture X is the presenting sponsor of the Rose Bowl Game since 2022. Capital One is one of the top three sponsors of the
NCAA The National Collegiate Athletic Association (NCAA) is a nonprofit organization that regulates student athletics among about 1,100 schools in the United States, Canada, and Puerto Rico. It also organizes the athletic programs of colleges an ...
, paying an estimated $35 million annually in exchange for advertising and access to consumer data. Capital One also sponsored the
EFL Cup The EFL Cup (referred to historically, and colloquially, as the League Cup), currently known as the Carabao Cup for sponsorship reasons, is an annual knockout competition and major trophy in men's domestic football in England. Organised by the ...
, an English Soccer Competition, from 2012 to 2016. The company sponsored
Sheffield United F.C. Sheffield United Football Club is a professional football club in Sheffield, South Yorkshire, England, which compete in the . They are nicknamed "the Blades" due to Sheffield's history of cutlery production. The team have played home games at ...
from 2006 to 2008. From 2009 to 2022, the University of Maryland Terrapins football team played at Capital One Field at Maryland Stadium (formerly Byrd Stadium), a naming-rights deal inherited in the bank's acquisition of
Chevy Chase Bank Chevy Chase Bank, F.S.B. was the largest locally based banking company in the Washington Metropolitan Area. It was acquired by Capital One in February 2009, and rebranded as Capital One Bank in September 2010. Despite its name, Chevy Chase Ban ...
. In 2017, the company became the sponsor of the
Capital One Arena Capital One Arena is an indoor arena in Washington, D.C. Located in the Penn Quarter neighborhood, the arena sits atop the Gallery Place (WMATA station), Gallery Place rapid transit station of the Washington Metro. It has been largely considered ...
in
Washington D.C. ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, Na ...
In 2018, to celebrate the
Washington Capitals The Washington Capitals (colloquially known as the Caps) are a professional ice hockey team based in Washington, D.C. The team competes in the National Hockey League (NHL) as a member of the Metropolitan Division in the Eastern Conference (NHL) ...
' second-ever
Stanley Cup Finals The Stanley Cup Finals in ice hockey (also known as the Stanley Cup Final among various media, french: Finale de la Coupe Stanley) is the National Hockey League's (NHL) championship series to determine the winner of the Stanley Cup, North America ...
appearance, the firm temporarily changed its logo by replacing the word "Capital" with the Capitals' titular logo, without the "s" plural. In 2022,
Major League Baseball Major League Baseball (MLB) is a professional baseball organization and the oldest major professional sports league in the world. MLB is composed of 30 total teams, divided equally between the National League (NL) and the American League (AL), ...
announced that Capital One is the official bank and credit card and presenting sponsor of the
World Series The World Series is the annual championship series of Major League Baseball (MLB) in the United States and Canada, contested since 1903 between the champion teams of the American League (AL) and the National League (NL). The winner of the World ...
.


Corporate citizenship

Capital One operates some charitable programs. The accountability organization
National Committee for Responsive Philanthropy The National Committee for Responsive Philanthropy (NCRP) is a progressive advocacy and watchdog group that monitors charitable spending in the United States. It was established in 1976 and is based in Washington, D.C. It advocates for a greater fo ...
has been highly critical of Capital One's relatively low rate of giving, stating that "Capital One's philanthropic track record is dismal". The organization pointed out that Capital One's donations of 0.024% of revenue were much less than the industry median of 0.11% of revenue. Capital One has disputed the groups figures, saying that "... In 2011 alone, our giving totals are more than 6 times greater ($30 million) than the number given by the NCRP".


Criticism and legal actions


Fines for misleading customers to pay extra for services

In July 2012, Capital One was fined by the
Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all nation ...
and the
Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mortg ...
for misleading millions of its customers, for example by requiring customers to pay extra for payment protection or credit monitoring when they took out a card. The company agreed to pay $210 million to settle the legal action and to refund two million customers. This was the CFPB's first public enforcement action.


Automated dialing to customers' phones

In August 2014, Capital One and three collection agencies entered into an agreement to pay $75.5 million to end a consolidated class action lawsuit pending in the
United States District Court for the Northern District of Illinois The United States District Court for the Northern District of Illinois (in case citations, N.D. Ill.) is the federal trial-level court with jurisdiction over the northern counties of Illinois. Appeals from the Northern District of Illinois ar ...
alleging that the companies used an automated dialer to call customers' cellphones without consent, which is a violation of the
Telephone Consumer Protection Act of 1991 The Telephone Consumer Protection Act of 1991 (TCPA) was passed by the United States Congress in 1991 and signed into law by President George H. W. Bush as Public Law 102-243. It amended the Communications Act of 1934. The TCPA is codified as 4 ...
. It is notable that this legal action involved informational telephone calls, which are not subject to the "prior express written consent" requirements which have been in place for telemarketing calls since October 2013.


2014 amendment to terms of use to allow personal visits

In 2014, Capital One amended its terms of use to allow it to "contact you in any manner we choose", including a "personal visit . . . at your home and at your place of employment." It also asserted its right to "modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose." The company stated that it would not actually make personal visits to customers except "As a last resort, . . . if it becomes necessary to repossess sports vehicle". Capital One also attributed its assertion of a right to "
spoof Spoof, spoofs, spoofer, or spoofing may refer to: * Forgery of goods or documents * Semen, in Australian slang * Spoof (game), a guessing game * Spoofing (finance), a disruptive algorithmic-trading tactic designed to manipulate markets __NOTOC__ ...
" as necessary because "sometimes the number is 'displayed differently' by 'some local phone exchanges,' something that is 'beyond our control'".


July 2019 security breach

Capital One publicly acknowledged on July 29, 2019, that they had found unauthorized access had occurred ten days earlier by an individual who had breached the account and identity security of 106 million people in the United States and Canada. The
FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...
arrested Paige Thompson, who had previously worked as a
software engineer Software engineering is a systematic engineering approach to software development. A software engineer is a person who applies the principles of software engineering to design, develop, maintain, test, and evaluate computer software. The term ''p ...
for
Amazon Web Services Amazon Web Services, Inc. (AWS) is a subsidiary of Amazon that provides on-demand cloud computing platforms and APIs to individuals, companies, and governments, on a metered pay-as-you-go basis. These cloud computing web services provide d ...
, Capital One's
cloud hosting Cloud computing is the on-demand availability of computer system resources, especially data storage ( cloud storage) and computing power, without direct active management by the user. Large clouds often have functions distributed over mul ...
company. Capital One declared that Thompson had accessed about 140,000
Social Security numbers In the United States, a Social Security number (SSN) is a nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents under section 205(c)(2) of the Social Security Act, codified as . The number is issued t ...
, a million Canadian social insurance numbers; 80,000 bank account numbers, and an unknown number of names and addresses of customers. Capital One began offering free credit monitoring services to those affected by the breach. Thompson's employment at Amazon appears to have ended in September 2016. Amazon stated that the security vulnerability she used to access Capital One could have been discovered by anyone, the information that facilitated her activity was not gained from work at Amazon, and that she gained access via "a misconfiguration of the (Capital One-designed) web application and not the underlying (Amazon-designed) cloud-based infrastructure".


Details of the breach

Forensic analysis determined Thompson's actual hacking activity occurred in March 2019, then she posted the information to different outlets over the next three months. In April she posted a trove of leaked data along with instructions on how to access the company's credentials for more data extraction. In July a
white-hat A white hat (or a white-hat hacker, a whitehat) is an ethical security hacker. Ethical hacking is a term meant to imply a broader category than just penetration testing. Under the owner's consent, white-hat hackers aim to identify any vulnerabil ...
alerted Capital One to Thompson's hacking activity. Thompson pleaded not guilty to charges of wire fraud and computer fraud and abuse. During the investigations and subsequent data freeze, millions of Capital One accounts were locked; their owners were unable to process financial transactions, meet payments, or gain access to their financial records.


Capital One response

Critics lambasted the bank's effort to downplay the hack while investigations were ongoing, and described the bank as more concerned about its image than the needs of its clients. Several Capital One customers stated that the first time they heard about the hack was through the media and the bank did not disclose the breach or explain its implications to affected customers. On
social media Social media are interactive media technologies that facilitate the creation and sharing of information, ideas, interests, and other forms of expression through virtual communities and networks. While challenges to the definition of ''social medi ...
and in the mainstream press, Capital One's contradictory July 2019 press statement was mocked for saying "No bank account numbers or Social Security numbers were compromised," but then listing hundreds of thousands of bank account numbers and social security numbers that were compromised.


Federal Reserve Action

On August 6, 2020, the Federal Reserve Board of Governors announced a cease and desist order against Capital One resulting from the breach. The order mandated, among other things, significant improvements in Capital One's governance, risk management and compliance (GRC) practices.


Lawsuits

Lawsuits were filed against Capital One and its employees in federal and circuit courts, led by the firms Colson Hicks Eidson, Franklin D. Azar and Associates P.C., and several others. Additional lawsuits were filed against both Amazon and GitHub, alleging they were aware of the exploit but did not act to fix or patch the vulnerability.


Government investigations

In 2015 the bank disclosed that it was under federal investigation for bank fraud,
money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...
, and possible racketeering charges. No further information was given and government investigators would only confirm that it was under scrutiny for "unspecified charges." In 2018, Capital One was fined $100 million for failure to monitor, detect, and prevent money laundering. Charging documents specified Capital One failed to file suspicious activity reports, had deficiencies in its risk assessment, remote deposit capture and generally had weaknesses that compromised national bank security controls. The bank was the subject of a larger investigation that alleged funds were siphoned out of US jurisdiction to safe havens. In January 2021, Capital one was fined $390 million by
FINCEN The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terr ...
for anti-money laundering control failure concerning a now-defunct small portfolio of check-cashing businesses that Capital One acquired around 2008 and subsequently exited from in 2014. Capital One later admitted that it failed to file thousands of suspicious activity reports and lapsed on filing currency transaction reports on around 50,000 reportable cash transactions valued around $16 billion.


Notable office buildings

*
Capital One Tower (Virginia) Capital One Tower is a high-rise office building in Capital One Center, a mixed-use development adjacent to the McLean station in Tysons, Virginia. Capital One Tower is the tallest occupied building in the Washington metropolitan area at in h ...
- company headquarters *
Capital One Tower (Louisiana) The Capital One Tower is a Class A skyscraper located in Lake Charles, Louisiana and is the tallest building in the city. The building was designed by Lloyd Jones Brewer Associates of Houston and was constructed by Miner-Dederick of Houston and ...
* Place St. Charles (New Orleans)


References


External links

* * (Canada) * (United Kingdom) {{Portalbar, Banks, Virginia Banks based in Virginia American companies established in 1994 Banks established in 1994 1994 establishments in Virginia Companies based in McLean, Virginia Companies based in Richmond, Virginia Companies listed on the New York Stock Exchange Corporate spin-offs 1994 initial public offerings