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FDIC Federal Register Citations

Capital One Financial Corporation 
2980 Fairview Park Drive
Suite 1300
Falls Church, VA 22042-4525 
FAX 703-205-1094

July 11, 2001

Federal Deposit Insurance Corporation 
550 17th Street, NW
Mail Stop 1-5 
Washington, DC 20429 

Attn: Robert E. Feldman Executive Secretary 

Re: Interpretation of Federal Deposit Insurance Act -- Business of Receiving Deposits

Ladies and Gentlemen:

Thank you very much for providing Capital One the opportunity to comment on the proposed regulation issued by the Federal Deposit Insurance Corporation (the "FDIC") clarifying what constitutes "the business of receiving deposits other than trust deposits," a standard used throughout the Federal Deposit Insurance Act (the "FDIA"). Capital One Financial Corporation, Falls Church, Virginia (together, with all of its subsidiaries and affiliates, "Capital One") is a holding company whose principal subsidiaries, Capital One Bank, Glen Allen, Virginia and Capital One, F.S.B., Falls Church, Virginia, offer consumer lending and deposit products, including credit cards, installment loans, and automobile financing. Both of these principal subsidiaries hold deposits that are FDIC-insured. Capital One had 36.5 million customers and $31.6 billion in managed loans outstanding, as of March 31, 2001. A Fortune 500 company, Capital One is one of the largest providers of MasterCard and Visa credit cards in the world.

Capital One would like to express its support for the FDIC's proposal. The FDIC has proposed that an insured depository institution may satisfy the threshold requirement for receiving the benefits (and bearing the responsibilities) of federal deposit insurance "by the continuous maintenance of one or more non-trust deposit accounts in the aggregate amount of $500,000." 66 FR 20102. The FDIC's proposed standard would have a minimal impact on Capital One's state-chartered credit card bank (Capital One Bank), because Capital One Bank accepts "jumbo CD" deposits from the general public in amounts equal to and exceeding $100,000.

Capital One agrees that an institution that continuously maintains $500,000 or more in non-trust deposits should be deemed "engaged in the business of receiving deposits other than trust funds" for the purposes of the FDIA. The source from which the bank obtains those funds, the types of accounts offered by the bank, and the number of accounts held by the bank should not be relevant to the standard. We agree that the FDIC's proposed $500,000 requirement is workable and will provide certainty to the broad variety of institutions that currently carry deposit insurance.

Capital One appreciates the FDIC's reasoned effort to provide an interpretation of the disputed standard that may be uniformly applied throughout the FDIA and in the courts. We thank you again for allowing us the opportunity to comment on the proposed regulation, and please do not hesitate to contact us if you have any questions.

Respectfully submitted,

/s/ Frank R. Borchert, III

Frank R. Borchert, III
 Deputy General Counsel 
Capital One Financial Corporation
Last Updated 07/12/2001

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