Capital One Financial Corporation
), the McLean, VA-based credit services firm has received subpoenas
from the New York District Attorney's Office as part of a
money-laundering investigation, per a Bloomberg report. The probe
pertains to its commercial banking business of certain check-casher
According to the bank sources, Capital One is gradually withdrawing
from its business of providing services to check-cashers clients
and similar types of companies. This is because it no longer fits
into the scheme of things for the bank.
Regulators have recently been keeping a strict vigil to prevent
money-laundering frauds committed by big banks. Federal Deposit
Insurance Corporation, the independent agency responsible for
ensuring safety of the depositors' accounts, ordered Discover
Financial Services (
) to shore up its anti money-laundering practices. In compliance
with the order, the Riverwoods, IL-based credit services company
took steps to tighten its payments system.
Amid strict scrutiny by regulators and consumer advocates, many
banks are revoking the practice of short-term payday lending. Among
the banking heavyweights, U.S. Bancorp (
) and Wells Fargo & Company (
) have already repealed advance loans to direct-deposit customers.
Regarding the latest case, Capital One has assured every
cooperation to facilitate the investigation. Whatever the outcome,
we can expect regulators to stop gullible depositors from being
cheated of their rightful earnings.
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