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Podcast 148: Capital One Merger With ING Direct

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Today on the Consumerism Commentary Podcast, Bryan J Busch talks to John Taylor, president and CEO of the National Community Reinvestment Coalition.

They talk about the benefits and drawbacks of Capital One merging with ING Direct USA, and how the Federal Reserve Bank is treating this merger.

Consumerism Commentary Podcast
CapitalOne Merger With ING Direct: S06E19 / 148

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Table of contents

Consumerism Commentary Podcast[00:00] Introduction from Bryan J Busch
[00:33] Interview with John Taylor
– [00:46] The merger between CapitalOne and ING Direct is not a done deal
– [01:50] Ongoing criticism of the merger
– [03:40] CapitalOne’s risk increases with its size
– [06:56] What could change for ING Direct customers?
– [09:41] How the Dodd-Frank bill affected this merger
– [11:35] The free market needs to be paired with fairness
– [13:12] Privacy may play too big a role in such mergers
– [15:17] What can ING Direct employees expect to see change?
– [16:14] The Fed should require more transparency
– [18:00] Capital One made a $180B pledge that may be ignored
– [18:49] The Federal Reserve Bank has taken small steps toward serving the public
[20:49] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

Theme music by Mindcube.

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Traveling First Class for the First Time

This article was written by in Travel. 15 comments.

After using the Continental Airlines OnePass Plus Card as my primary credit card for personal and travel spending for the past year, and the resulting accumulation of miles in Continental’s frequent flyer program, I decided to cash in. For 35,000 points, I was able to upgrade the round-trip ticket from Newark to Chicago. I would have preferred to use points for a longer flight, such as one to California to visit family, but upgrading those fares from most economy fare classes require an additional payment (a co-pay) beyond the miles.

As a result of the recent merger with United Airlines, Continental has begun changing some of their frequent flyer benefits. For example, you no longer have to have earned a certain level (Silver Elite, Gold Elite, or Platinum Elite) to take advantage of a few benefits like expedited bag check lines, priority status for checked luggage (first on the carousel at arrival), expedited security check lines, and priority boarding. Unfortunately for me, my primary airport is Newark, where these benefits often mean little, especially during peak travel periods.

Continental Airlines LogoWith a first class boarding pass, I was able to board in the second group of passengers, after military personnel. Being one of the first four of five people to board allowed me to quickly stow my carry-on and sit comfortably for the next 30 minutes as the rest of the passengers boarded. While boarding, a flight attended offered drinks (of any type; alcoholic drinks are complimentary in first class) to those already settled.

While the DirecTV entertainment system normally costs $5.99 or $7.99 (with a $2 discount to Continental credit cardholders), if this entertainment is available on the flight, it is free to first class passengers. Even when a meal isn’t offered in the main cabin, first class passengers receive a complimentary meal with a tray, a small tablecloth, and silverware (well, stainless steel, not silver). On the initial part of my trip, the flight attended distributed warm towels before the meal.

The seating arrangement was about twice as spacious as the seats in the main cabin, and the seats were slightly more comfortable. The seats reclined much farther which encouraged me to relax more, particularly considering how exhausted I was by the end of the conference.

All of these conveniences added up to a nicer travel experience, but even first class status can prevent delays, turbulence, and difficulties getting around in the airports. If I were to have money to spare or unlimited frequent flyer miles, I would travel first class all the time. The benefits may be minor and flying without the conveniences is often adequate, but it could be an advantage for longer flights, particularly if I begin taking overnight flights when traveling long distances.

Even the best first class ticket can’t prevent the annoyances of moving through an airport, so while the fares call for a higher price, traveling by air is still often a problematic endeavor.

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Department of Justice Blocks AT&T Acquisition of T-Mobile

This article was written by in Consumer. 11 comments.

Earlier this year, AT&T announced its plans to acquire T-Mobile, a plan that would change the landscape of wireless service in the United States and pave the way for an industry dominated by two large players: the new AT&T and Verizon Wireless. Today, the U.S. Justice Department stepped in, issuing a complaint to block the acquisition.

T-Mobile is currently a lower-cost option for wireless service, and the acquisition would most likely result in less competition and higher prices. Earlier this year, the Department of Justice blocked a merger between H&R Block and TaxAct, and the move was questioned when deals like the one between AT&T and T-Mobile were allowed to continue. As we can see now, the government is attempting to take the anti-duopoly approach across industries.

The Comcast acquisition of NBC was a different type of acquisition, and the Department of Justice did not seek to block it. The unified company can now control media from their creation to delivery, and this type of vertical integration seems to not be seen as anti-competitive, even though it could result in increased cost for the consumer and content exclusivity where none existed before. Deals like the one between AT&T and T-Mobile or between H&R Block and TaxAct take a marketplace and offer the consumer fewer choices.

Cell PhoneSprint, the distant fourth player in wireless, lobbied the Department of Justice to block the merger. While the block may be in the best interest of consumers, it’s definitely in the best interest of Sprint, likely to be pushed out of the market after the proposed acquisition. If the shoe were on the other foot, and AT&T were to buy Sprint, T-Mobile would be the company seeking to block the deal on behalf of consumers.

Consolidations and acquisitions can be good for the economy when there are major inefficiencies. Capitalists, for the most part, don’t want the government stepping in to block he progress of business and the growth of corporate empires. In theory, if one company gets so large that the consumer is left with poor choices, the market will eventually correct itself with new players willing to meet the neglected needs of the consumer. But when the cost of becoming a large enough presence in a market dominated by one or two companies is prohibitive, as it most likely is for offering cellular service due to the necessary infrastructure, blocking an acquisition might be a better solution than waiting a decade, a generation, or more for new competitors to re-shape the consumer landscape.

In its own words, the Department of Justice explains the decision:

The Department filed its lawsuit because we believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services.

Consumers across the country, including those in rural areas and those with lower incomes, have benefitted from competition among the nation’s wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to reap the benefits of that competition.

This isn’t the only acquisition of concern recently; Capital One was the winning bidder for ING Direct. Although the deal would make Capital One “only” the sixth largest bank in the United States when measured by deposits, the government and regulators are not taking this deal lightly, seeking more comments from the public.

Do you think the Department of Justice should block the AT&T acquisition of T-Mobile?

Photo: whiteafrican
Department of Justice

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United MileagePlus Explorer Card Review

This article was written by in Credit. 6 comments.

Air travel used to be seen as a luxury, but those days are long gone. If flying was ever fun and convenient, it’s not anymore. My last flight from California, a trip to visit family, was plagued with delays and inconveniences. It was a good thing the flight was delayed; otherwise, I might have missed the flight due to an hour-long security line.

While airlines continue to reduce benefits for customers, like free meals, pillows, and checked bags, they are paying more attention to their most frequent fliers and customers of their branded credit cards. Airlines who partner with credit card issuers are willing to give certain customers a little bit more than everyone else. A good example of this is the United MileagePlus® Explorer Card, which offers consumers enough bonus miles for a free flight right away.

Note: With the merger of Continental Airlines and United Airlines complete as of March 2012, the Continental OnePass Plus and OnePass Presidential Plus cards have been eliminated for new customers. The United MileagePlus Explorer Card offers the same benefits that the OnePass Plus card offered previously.

United MileagePlus Explorer CardAll new cardholders of the United MileagePlus Explorer Card will receive 25,000 bonus miles after making one purchase. Then, new customers will earn 5,000 additional miles after adding an authorized cardholder to the account. Every year a cardholder spends $25,000, Chase will add 10,000 more miles. In total, up to 40,000 bonus miles are available the first year and 10,000 bonus miles are available every additional year. Miles never expire and there is never a cap to the number of miles customers can earn. Every dollar spent on the United MileagePlus Explorer Card earns miles, and if a cardholder purchases a United or Continental flight with the card, Chase rewards the customer with double miles.

United offers in-flight and flight-related rewards to its credit card customers in addition to the miles. All United MileagePlus Explorer Card members will have the following perks:

  • The first bag per ticket can be checked for free on flights operated by United, up to a $50 savings per person.
  • You’ll be invited to board your flight ahead of general boarding with priority boarding.
  • You will receive two passes to visit the United Club every year.
  • You’ll have exclusive access to purchase once-a-lifetime experiences from Inside Access from Chase.
  • The card comes with travel protection benefits.

A quick glance at the “Inside Access” program shows that it offers the opportunity to buy tickets to events such as an evening on Broadway including a show, an opportunity to meet the cast, and dinner at Sardi’s. This event is $200 per person — not a bad deal considering a ticket for a show can easily cost that much on its own.

When using a credit card, it’s important to know the pricing details. The United MileagePlus Explorer Card offers a 15.24% variable APR on both purchases and balance transfers. There is a $95 fee associated with this card, but that fee is waived for the first year, so new customers have time to test drive the bonus miles and overall offer.

The United MileagePlus Explorer Card is a brand new offer and it comes in as one of the best airline miles credit cards available today. Considering that United has merged with Continental, this card allows its members to travel on two airlines with benefits rather than just one. To take advantage of 25,000 bonus miles right away, consider applying for the United MileagePlus Explorer Card.

United MileagePlus® Explorer Card

If you’re a current cardholder, feel free to share your thoughts about the card’s benefits and customer service, as well as your experience with United Airlines, in the comments area of this article.

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Wells Fargo Fined For Misleading Customers and Falsifying Documents

by Flexo

It always pays to shop around. If more mortgage customers didn’t choose to borrow from the trusted institution that held their savings and checking accounts without question, it seems that these customers could have found lower interest rates, particularly if these borrowers were customers of Wells Fargo. The Federal Reserve is alleging that between 2004 ... Continue reading this article…

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Podcast 110: George Hobica, Airfarewatchdog

by Flexo

Today’s guest on the Consumerism Commentary Podcast is George Hobica, president and founder of the travel comparison website Airfarewatchdog. George discusses Airfarewatchdog, how the site works in finding low air fares, several great deals many people don’t know about and offers many airline travel tips. Consumerism Commentary Podcast #110 George Hobica, Airfarewatchdog: S05E06 / 134 ... Continue reading this article…

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Government Blocks Merger of H&R Block and TaxACT

by Flexo

The Department of Justice filed an anti-trust lawsuit against H&R Block. This second-largest income tax preparation service intended to acquire the company that owns third-largest income tax preparation service, TaxACT. Based on the number of customers who used these companies’ services to self-file 2010 tax returns, the combined company would still be a distant second ... Continue reading this article…

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Ally Bank in Talks to Buy ING Direct

by Flexo

Update: Capital One has purchased ING Direct. A little less than eighteen months ago, I mentioned that ING Direct was scheduled to be sold off. The online bank’s parent company, ING Group, received taxpayer assistance. The plan is for ING Group to sell ING Direct USA to pay back the European Commission. The New York ... Continue reading this article…

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