Capital One

1994–2004

Richard Fairbank and Nigel Morris developed the idea of using information technology and statistical analysis to create customized credit card offers for different segments of customers in 1987. At the time, most credit cards would offer the same terms—interest rate and annual fee—to almost everyone, regardless of the financial risks of each customer.^[4] However, Fairbank and Morris' idea was to drop the fee and target various credit card terms to specific customers. They consulted with Oracle Corporation on how to compile the demographics and other statistics that would help them sort out and identify those customer market segments.^[5]

They then started soliciting banks regarding using their approach, indicating that they anticipated large profits based on the large numbers of customers they projected to enroll.^[6][7] They convinced Richmond, Virginia-based Signet Bank to start a credit card division called Signet Financial in 1988 that would utilize their approach. As part of the deal, they became employees of Signet.^[4] In 1991, Fairbank and Morris were successful with a mass mailing that offered to transfer existing credit card balances from other banks' credit cards for the opportunity of a lower interest rate with Signet.^[7]

In July 1994, Signet Financial announced the corporate spin-off of Signet Financial, at first naming it OakStone Financial with Fairbank as CEO and Morris as COO.^[8][9] After the initial public offering in October 1994, the new company was renamed Capital One.^[10][11] 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.^[12] This strategy is risky in that it can lead to losses during bad times.^[12] Capital One attributed its relative success as a monoline to its use of data collection to build demographic profiles, allowing it to target personalized offers of credit directly to consumers.^[13]

1996–2005

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.^[14]

In 1996, Capital One expanded to the United Kingdom and Canada.^[15][16]

In July 1998, Capital One acquired auto financing company Summit Acceptance Corporation.^[17]

In 1999, CEO Richard Fairbank announced moves to use Capital One's experience with collecting consumer data to offer loans, insurance, and phone service.^[18]

In October 2001, PeopleFirst Finance was acquired by Capital One.^[19] The companies were combined and re-branded as Capital One Auto Finance Corporation in 2003.^[20]

In late 2002, Capital One and the United States Postal Service proposed a negotiated services agreement (NSA) for bulk discounts in mailing services.^[21] The resulting three-year agreement^[22] was extended in 2006.^[23] In June 2008, however, Capital One filed a complaint^[24] with the USPS regarding the terms of the next agreement,^[25] citing the terms of the NSA of Capital One's competitor, Bank of America. Capital One subsequently withdrew its complaint to the Postal Regulatory Commission following a settlement with the USPS.^[26]

Automobile loan financer Onyx Acceptance Corporation was acquired by Capital One in January 2005.^[27]

2005–present

In 2005, Capital One acquired New Orleans, Louisiana-based Hibernia National Bank for $4.9 billion in cash and stock, becoming the first monoline credit card issuer to buy a bank.^[28][29] This reduced its dependency on the credit-card business.^[30]

Capital One acquired Melville, New York-based North Fork Bank and its subsidiary, GreenPoint Mortgage, for $13.2 billion in cash and stock in 2006.^[31] In August 2007, during the subprime mortgage crisis, Capital One closed GreenPoint Mortgage, due in part to investor pressures, cutting 1,900 jobs and leading to $860 million in charges.^{[32][33][34][35]}

In August 2007, Capital One agreed to acquire NetSpend for $700 million. In November 2007, the transaction was modified; Capital One instead acquired just a minority interest in NetSpend.^[36]

The U.S. Securities and Exchange Commission alleged that Capital One understated auto loan losses during the 2008 financial crisis. In 2013, Capital One paid $3.5 million to settle the case, but was not required to directly address the allegations of wrongdoing.^[37]

In 2008, Capital One received an investment of $3.56 billion from the United States Treasury as a result of the Troubled Asset Relief Program.^[38][39] In June 2009, Capital One repurchased the stock the company issued to the U.S. Treasury for $3.67 billion, resulting in a profit of over $100 million to the U.S. Treasury.^[40]

In 2008, Capital One debuted its blue and red "swoosh" logo, and began a $13 billion marketing campaign. The similarity of the logo to that of Credit One Bank, which adopted a similar logo in 2006, caused confusion among consumers, with many not realizing they were separate companies.^[41]

In February 2009, Capital One acquired Chevy Chase Bank for $520 million in cash and stock.^{[42][43][44][45]}

In January 2011, Capital One acquired Canada-based Hudson's Bay Company's private credit card portfolio from GE Financial.^[46]

In April 2011, Capital One signed a deal with Kohl's to handle Kohl's private label credit card program that was previously serviced by Chase Bank for a seven-year period for an undisclosed amount.^[47] The contract was extended several times.^[48]

In June 2011, ING Group announced the sale of its ING Direct division to Capital One for $9 billion in cash and stock.^[49][50] The transaction was scrutinized by Barney Frank, Thomas M. Hoenig, and others on the basis of the bank becoming too big to fail, but nevertheless, the acquisition received regulatory approval and was completed in February 2012.^{[51][52][53][54]} ING Direct was rebranded as Capital One 360 in November 2012.^[55]

In August 2011, Capital One acquired the U.S. credit card operations of HSBC.^[56] 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.^[57] The acquisition also included private issued credit cards for such companies as Saks Fifth Avenue, Neiman Marcus, and Lord & Taylor that were previously handled by HSBC.^[58]

In February 2012, along with several other banks, Capital One announced support for the Isis Mobile Wallet payment system.^[59] However, in September 2013, Capital One dropped support for the venture.^[60]

In 2012, Capital One closed 41 branch locations.^[61]

In February 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".^[62] The company stated that it would not actually make personal visits to customers except "As a last resort, . . . if it becomes necessary to repossess [a] sports vehicle".^[62] Capital One also attributed its assertion of a right to "spoof" as necessary because "sometimes the number is 'displayed differently' by 'some local phone exchanges,' something that is 'beyond our control'".^[63]

In February 2014, Capital One acquired 25% of ClearXchange, a peer-to-peer transaction money transfer service.^[64] ClearXchange was sold to Early Warning in 2016.^[65]

In October 2014, Capital One acquired Adaptive Path, a San Francisco-based user experience and digital design consultancy.^[66]

In January 2015, Capital One acquired Level Money, a budgeting app for consumers.^[67]

In May 2015, Capital One announced the closure of several branches in the Washington DC area.^[68]

In July 2015, the company acquired Monsoon, a design studio, development shop, marketing house and strategic consultancy.^[69]

In 2015, Capital One acquired General Electric's Healthcare Financial Services unit, which included $8.5 billion in loans made to businesses in the healthcare industry, for $9 billion.^[70]

In October 2016, Capital One acquired Paribus, a price tracking service, for an undisclosed amount.^[71][72]

The company exited the mortgage origination business in November 2017 due to competition, laying off 1,100 employees.^[73][74]

In January 2018, Capital One sold its is online brokerage with more than 1 million brokerage accounts to E-Trade for $170 million.^[75]

In May 2018, the company acquired Confyrm, a digital identity and fraud alert service.^[76][77][78]

In July 2018, Capital One sold its full-service investment advisory and brokerage division to Woodbury Financial.^[79]

In November 2018, Capital One acquired Wikibuy, a shopping comparison app and browser extension from an Austin, Texas start-up business and renamed it Capital One Shopping.^[80]

In June 2019, Capital One acquired BlueTarp Financial, a business-to-business credit services provider.^[81][82]

In July 2019, Capital One signed a deal with Walmart to handle Walmart's private label and co-branded credit card programs that was previously serviced by Synchrony Financial.^[83] Walmart terminated the deal in April 2024 after customer service failures by Capital One.^[84]

In August 2019, Capital One acquired KippsDeSanto, an investment bank focused on government contractors.^[85][86]

In October 2021, Capital One acquired the healthcare investment bank of TripleTree Holdings.^[87][88]

In November 2021, the company introduced Venture X, an incentive program credit card, with a $395 annual fee.^[89]

Quick facts Initiator, Target ...

Acquisition of Discover Financial by Capital One

Initiator	Capital One
Target	Discover Financial
Type	Full acquisition
Cost	US$35 billion
Initiated	February 19, 2024
Completed	May 18, 2025

Close

In February 2024, Capital One agreed to acquire Discover Financial in an all-stock deal worth $35.3 billion, making it the largest credit card issuer in the U.S.^[90][91][92] The deal was approved by U.S. banking regulators in April 2025 after an investigation by the Attorney General of New York and a lawsuit by customers on anti-trust concerns. The acquisition was completed in May 2025.^{[93][94][95][96]}

In November 2025, Capital One acquired Hopper Travel Software, which powered Capital One Travel.^[97]

In January 2026, the company acquired Brex for $5.15 billion.^{[98][99][100]}

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 and the Consumer Financial Protection Bureau 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.^[116] The company agreed to pay $210 million to settle the legal action and to refund two million customers.^[117] This was the CFPB's first public enforcement action.^[118]

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 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.^[119] 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.^[120]

July 2019 data breach

In July 2019, in one of the largest data breaches of personal information, Capital One found unauthorized access had occurred by an individual who had breached the account and identity security of 106 million people in the United States and Canada.^[121][122]

The FBI arrested Paige Thompson, who had previously worked as a software engineer for Amazon Web Services, a cloud computing hosting company used by Capital One. Thompson had accessed about 140,000 Social Security numbers, 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 report monitoring services^[123] and identity theft protection^[124] to those affected by the breach.^[125][126] It was ultimately determined there was no evidence the data was shared by Thompson.^[127]

Amazon stated that the security vulnerability used to access the Capital One records 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".^[128]

In 2022, Thompson was convicted of five felonies and two misdemeanors. She was sentenced to time served and five years of probation.^[127][129]

Capital One was alerted to the breach on July 17, 2019, 12 days before it was publicly acknowledged. 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.^[130] On social media and in the mainstream press, Capital One's contradictory July 2019 press statement was mocked^[131][132] 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.^[133]

In August 2020, the Federal Reserve Board of Governors announced a cease and desist order against Capital One resulting from the data breach.^[134] The order mandated, among other things, significant improvements in Capital One's governance, risk management and compliance (GRC) practices. The Federal Reserve ended the enforcement action in 2023.^[135]

Lawsuits were filed against Capital One and its employees in federal^[136] and circuit courts, led by the firms Colson Hicks Eidson, Franklin D. Azar and Associates P.C., and several others.^[137][138]

Alleged underpayment of interest

Two consumer class action lawsuits were filed against Capital One in Virginia in July 2024. A suit related to its acquisition of ING Direct USA, in 2012, claimed that, since February 2013, the company unfairly maintained 360 Savings online savings account as a higher yield rate than was available to its other depositors.^[139] Later that month, a proposed consumer class action was also filed, in a bid to block a merger with Discover Financial, claiming that the acquisition would be in violation of federal antitrust laws.^[94]

In January 2025, the Consumer Financial Protection Bureau sued Capital One for cheating savings account holders out of $2 billion by "deceptive, abusive and illegal" practices which obscured the difference between the high-interest "360 Performance Savings" accounts vs. low-interest "360 Savings" accounts; however, the following month, after Donald Trump became president of the United States, the suit was dropped.^[140][141]

The State of New York filed a similar lawsuit against Capital One in May 2025 on behalf of depositors promised "one of the country's highest interest rates" on their "360 Savings" accounts; however, they were only paid an annual interest rate of 0.30%; the higher rates were paid on the similarly-named "360 Performance Savings" accounts.^[142] A federal judge rejected the company's proposed $425 million settlement in November 2025.^[143]

Bank fraud, money laundering, and possible racketeering

In 2015 the bank disclosed that it was under federal investigation for bank fraud, money laundering, and possible racketeering charges. No further information was given and government investigators would only confirm that it was under scrutiny for "unspecified charges".^[144]

In 2018, Capital One was fined $100 million for failure to monitor, detect, and prevent money laundering.^[145] Charging documents^[146] 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 for anti-money laundering control failure concerning a now-defunct small portfolio of check-cashing businesses that Capital One acquired around 2008 and sold 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.^[147]