Capital One Forced to Increase Reserves
- Share via
Capital One Financial Corp. shares plunged, leading other credit card stocks lower, after the fifth-largest U.S. issuer of Visa and MasterCard said regulators required it to increase reserves for loan losses.
Capital One shares fell $20.12, or 40%, to $30.48 on the NYSE.
Federal regulators are scrutinizing lenders that expanded during the economic growth of the 1990s by going after customers with bad credit backgrounds and charging rates of 20% or higher.
Some investors said they were surprised that Capital One, which has had the lowest default rate among the top 10 U.S. credit card issuers since a recession took hold early last year, was forced to boost reserves.
Regulators said they were concerned Capital One might be growing too fast. The Falls Church, Va.-based company increased loans at an annual rate of 35% in the first six months of this year.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
