Capital One’s buyout of ING Direct worries customers


Now that ING Direct has been sold to Capital One, I’ve been bombarded with questions about what people should do with their deposit dollars. At this point, I’m recommending a wait and see strategy.

I have been in awe of ING Direct’s customer focus ever since the branchless bank launched in the United States.  When ING was first forming, they hosted focus groups to find out what people hated about their banks — and they did the opposite.

The first rule of ING’s code of conduct is a simple concept: “We will tell the truth.” Great businesses often start from this premise. Look at Costco, for example, which has “Obey the law” in its code of ethics.

That kind of customer focus allowed ING Direct to grow from nothing to have $82 billion on deposit from 7 million American customers.

But ING Direct’s European parent went insolvent in the banking crisis. When the European governments bailed the parent out, one of the conditions was that the company sell off different things, including the U.S. banking arm.

So ING Direct was put on the auction block and it was Capital One who plunked down $9 billion. That’s led to a lot of concern among ING Direct customers. Should you dump ING Direct? Is Capital One going to foul everything up? The reality is it’s completely impossible to know.

The best move is to sit and wait. Trust that things will continue to be OK. If Capital One messes things up, then you’ll have plenty of time to move money at that time. At this moment, ING Direct still offers good deals on checking and moderate deals on savings. (Their checking account was recently rated by Kiplinger as the best in America.) The also have a 5/1 ARM that is right around 2.9% at this time.

So for now, stay calm, stay with ING and see how Capital One handles it. They did pay $9 billion for the bank, so hopefully they don’t intend to drive it into the ground!

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