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COF, or Capital One Financial Corp. ( ) is a U.S. based bank holding company specializing in credit cards, home loans, auto loans, banking, and savings products. A member of the Fortune 500, the company helped pioneer the mass marketing of credit cards in the early 1990s, and it is now the fourth largest customer of the United States Postal Service and has the 8th largest deposit portfolio in the United States. It has its corporate offices in Tysons Cornermarker, unincorporated Fairfax Countymarker, Virginiamarker, near McLeanmarker.


Capital One was founded in 1993 by Richard Fairbank and Nigel Morris as a spin-off of Richmond, Virginiamarker-based Signet Banking Corp (which was subsequently acquired in 1997 by First Union Corp.).

Capital One entered the retail banking market with its acquisition of New Orleans, Louisianamarker-based Hibernia National Bank in 2005 and Melville, New Yorkmarker-based North Fork Bancorporation in 2006. North Fork Bank and Superior Savings of New England, both subsidiaries of North Fork Bancorporation, began using the branding of Capital One Bank on March 10, 2008.. On December 4, 2008, Capital One announced it would purchase Chevy Chase Bank for $520 million.

Capital One responded to the 2007 subprime mortgage financial crisis by jettisoning its mortgage platform, GreenPoint Mortgage, due in part to investor pressures.

On November 14, 2008, Capital One Financial Corporation was the recipient of $3.56 billion of the Emergency Economic Stabilization Act Federal bail-out in the form of a preferred stock purchase. On June 17, 2009, Capital One completed the repurchase of the 3,555,199 shares of the preferred stock the company issued to the U.S. Treasury.


Capital One Auto Finance

Capital One Financial Corporation is the parent company of Capital One Auto Finance, or COAF, based in Plano, Texasmarker. After buying PeopleFirst, it became the largest Internet auto lender, as well as one of the top US auto lenders overall.

The company, which previously sold auto loans only through direct mail and auto dealership, lets auto owners refinance existing auto loans and shoppers apply for new auto loans online. A decision usually comes within 15 minutes, after which the buyer receives a "blank check" for up to the approved auto loan amount, which the buyer uses to purchase a car. To the dealership, it is as if the buyer were paying cash. The checks can be used to purchase a new or used vehicle, or to refinance an existing auto loan with another lender.

COAF originates auto loans across the credit spectrum.

International operations

Capital One commenced operations in Canada in 1996. Its head office is located in Torontomarker, Ontariomarker. Unlike its diversified American parent, the Canadian business does not currently operate outside of the credit card market. Similar to the US Parent, Capital One Canada is Canada Post's second largest customer. In October 2008, Capital One Canada was named one of Greater Toronto's Top Employers by Mediacorp Canada Inc., which was announced by the Toronto Star newspaper.

The UKmarker headquarters of Capital One is in Nottinghammarker, Englandmarker.

The company was once active in Spainmarker, Francemarker and South Africa, but has since withdrawn from these markets.

Unusual growth

Unlike other diversified financial services firms, Capital One began as consumer lending "monoline" -- a company that only does consumer lending. Remaining a monoline is precarious because of the often-cyclical nature of consumer lending; it can be very profitable industry in good times and markedly unprofitable in bad, such that a monoline company—which lacks other sources of revenue—will go out of business or be acquired fairly cheaply during hard times. Most consumer lending monolines in the past 20 years have either gone out of business (e.g. The Money Store, NextCard, Royal Acceptance) or have been acquired (e.g. MBNA, Beneficial, First USA); Capital One is notable for having experienced neither.

Prior to this the company experienced tremendous growth as a monoline which it credited to its Information Based Strategy, a strategy it pioneered to use customer data to help tailor its products to customers, particularly subprime consumers. Capital One had one of the largest databases of consumer data at one time: over 3 terabytes of data by 1998. It attempted to leverage this strategy outside of the finance industry, most notably in the cell phone market as AmericaOne which it eventually sold to Sprint.While many monolines were acquired by larger, diverse banks, Capital One adopted the opposite strategy by expanding into retail banking in 2005. This was accomplished through the acquisition of Hibernia, North Fork and Chevy Chase, three large regional banks.


Capital One is a major sponsor of sports teams. In 2001 Capital One became the principal sponsor of the Florida Citrus Bowl, an annual college football game played in Orlando, Floridamarker, renaming it the Capital One Bowl. In the UK, the company sponsored Football League Championship football clubs Nottingham Forest from 2004-2009 and Sheffield United from 2006-2008.

In 2008-2009 they sponsored several curling events all across Canada.

Capital One sponsors a mascot challenge every year. The winner is announced on the day of the Capital One Bowl.


Like most credit card companies that issue cards to people with poor or no credit (called "subprime"), Capital One offers multiple cards with low limits to some consumers, which can result in multiple over-limit and late payment fees and is considered by some consumer advocates to be predatory and usurous. Defenders of the practice argue that credit issuers should not be held responsible for borrowers' decisions.

In February 2009, Capital One began sending notices to cardholders regarding "extraordinary changes in the economic environment." These notices informed consumers of changes to their accounts, including significant increases in default interest rates effective May 17, 2009. Cardholders are given the option of continuing use of the card at the higher variable interest rates, up to approximately 30%(if you are late)as of the printing of the notice, or to close the account and pay the balance down at the existing rate. The actual rate could climb much higher as it would be determined by adding 26.15% to the prime rate.

In Great Britain, Capital One has been involved in several harassment cases, due to the number of calls made by their Debt Collection arm to "defaulting" customers. Several cases have gone to court, with average payouts exceeding £6000. In such cases Capital One sought a gagging order as part of the settlement.

Decoupled debit card

In May 2007, Capital One began an experiment that has come to be known as a Decoupled debit card. This card is novel in that prior to this launch, a debit card was always tied to a traditional financial institution, such as a bank or credit union. CapitalOne's Mastercard-branded decoupled card did not require an account be opened with a "retail" financial institution, and was made in partnership with the Ukrops grocery chain, based in CapOne's hometown of Richmond, VA. The card was also tied to a reward program offered by Ukrops. That one year experiment ended in May 2008, and has been followed up with a national rollout of its own version of a decoupled debit card tied to its own reward program.

See also


  1. Capital One to Acquire Chevy Chase Bank
  2. " Tysons Corner CDP, Virginia." United States Census Bureau. Retrieved on May 7, 2009.
  3., Retrieved on 2008-04-04.
  4., Retrieved on 2008-04-04.
  6. Virginia Business Online: Q&A with Richard Fairbank
  7. [1]
  8. Capital One Selects Ardent Software's DataStage for Enterprise-Wide Data Warehouse Projects
  9. A big lender's credit card trap - MSN Money
  10. CapOne Turns Acquisition on its head
  11. CapitalOne becomes a Bank with checking accounts
  12. CapOne says its decoupled debit card pilots ended on schedule
  13. Decoupled debit card lives again!

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