Capital One Buying Chevy Chase
In yet another sign of the deep financial crisis we’re in, Capital One, a leading credit card company, plans to buy Chevy Chase Bank.
The deal would be another sign of how the financial crisis is fueling consolidation in the banking industry. Capital One, which would pay $520 million in cash and stock, has received a $3.56 billion investment from the Treasury Department as part of the government’s effort to stabilize the banking industry.
Sources said the deal should not have any immediate effect on Chevy Chase depositors or borrowers, and that no layoffs are currently planned. Chevy Chase, which faced massive losses on its portfolio of risky home loans made to borrowers during the housing bubble, was founded 39 years ago by B.F. Saul, a local businessman, and it is still controlled by his family.
Capital One, a McLean firm, would get Chevy Chase’s 250 branches — the wealthy region’s largest branch network. Capital One has pursued a strategy in recent years of buying regional banks to get access to their deposits, which the company uses as a cheap source of funding for its credit card operations.
