Capital One has won approval to acquire ING Direct for $9 billion, clearing the way for it to become the nation's fifth-largest bank.
The Federal Reserve, which regulates bank holding companies, announced the unanimous vote on Tuesday. It had delayed making an announcement on Monday after a closed-door meeting on the matter.
The Capital One deal is the first big test of the mergers-and-acquisitions approval powers granted to the Fed under the Dodd-Frank financial reforms passed in 2010 in the wake of the financial meltdown on Wall Street.
In a brief statement, the Fed said it had given its approval after directing Capital One to upgrade its risk-management functions to reflect the bank's new size and complexity.
Capital One Financial Corp., based in McLean, Va., had announced in June that it planned to buy the U.S. digital unit of the Netherlands-based company. The deal is aimed at expanding Capital One as a national bank without adding to its roughly 1,000 branches. ING Direct has about 7.5 million customers.
The Virginia bank has expanded aggressively in recent years, snapping up the Washington, D.C., area's Chevy Chase Bank and others.
Some community banks and consumer advocates had opposed the deal. They said it would create another bank that could put the broader financial system at risk, if it failed. And they argued that the acquisition relied too heavily on credit cards, which are a riskier business than general consumer banking.
About 65 percent of Capital One's revenue comes from its heavily advertised credit-card business, known for the slogan "What's in your wallet?" The bank also plans to buy HSBC's U.S. credit card business.