SecProbe.io

June 24, 2010

Mr. Richard D. Fairbank Chairman, Chief Executive Officer, and President Capital One Financial Corporation 1680 Capital One Drive McLean, Virginia 22102
Re: Capital One Financial Corporation
Form 10-K for Fiscal Year Ended December 31, 2009 Filed February 26, 2010 Form 10-Q for Fiscal Quarter Ended March 31, 2010
  File No. 001-13300

Dear Mr. Fairbank:
 We have reviewed your filings and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circum stances, please tell us w hy in your response.

After reviewing the information you provide in response to these comments, we may
have additional comments.
             Form 10-K for Fiscal Year Ended December 31, 2009

Selected Financial Data, page 25

1. We note from footnote seven to your Selected Financial Data on page 26 that the 2009 data
includes the impact of the ac quisition of Chevy Chase Bank, FSB (Chevy Chase) during the
current year. Given your disclosu re on page 113 that a majority of the loans acquired from
Chevy Chase were credit impaired and were predominantly accounted for pursuant to ASC
310-30/SOP 03-3 and your disclosures in Table I on page 91, we believe more transparency
is needed around presentation of as set quality ratios impacted by this acquisition, such as the
delinquency rate and net charge-off rate, similar to that done in other parts of the filing.
Please revise future filings to include footnote explanations to the asset quality ratios that would enable a reader to assess the impact of these acquired loans on th e ratios presented.

Mr. Richard D. Fairbank
Capital One Financial Corporation June 24, 2010
Page 2  Credit Concentration, page 57

 2. We note disclosure of your co mmercial real estate concentr ation in New York, which has
experienced market deterioration in reside ntial construction/rede velopment and Class A
office space. As it relates to your $2.4 billion in outstanding real estate construction loans as
of December 31, 2009 and to the extent that you us e interest reserves on these loans, please
address the following:

• Disclose the amount of such loans and the accompanying interest re serves as of each
period-end;
• Disclose how you monitor such projects throughout their lives to make sure the
properties are moving along as planned such that it is appropriate to c ontinue to capitalize
the interest on the loan;
• Disclose whether you have ever extended, rene wed or restructured terms of the related
loans, and the reasons for the changes;
• Describe your underwriting process for loans with interest reserves, and any specific
differences in how your underwrite loans with in terest reserves and loans that do not have
interest reserves; and
• Disclose whether any of your loans with interest reserves  are currently on nonaccrual
status.

 Loan Modifications and Restructurings, page 59

 3. We note the tabular disclosure on page 60 of your loan modifications  and restructurings,
which have increased from an immaterial  amount as of December 31, 2008 to $279.6 million
as of December 31, 2009.  We further note that due to the consolidation of your off-balance
sheet entities, your modifications and restruct urings have increased to $729.1 million as of
March 31, 2010.  Please address the following:

• Revise future filings to se parately disclose the amount of loan modifications and
restructurings which are considered troubled-d ebt restructurings (TDRs) pursuant to ASC
310-40;
• We note disclosure that a re structured loan is considered performing if the borrower
complies with the terms of the modified loan and has made payments in line with the modified terms over several payment cycles. We also note that all of these loans included
in Table 16 are not included as non-perfor ming loans at December 31, 2009. Please tell
us whether you have any previously classified  TDRs that are currently non-performing as
of March 31, 2010;
• Tell us whether at the time the loan is restru ctured you continue to accrue interest. If so,
tell us all of the factors you consider in making this determin ation so as to be reasonably
assured of repayment and performance according to the modified terms; and
• Tell us and revise future filings to quantify the types of concessions made (i.e. reduction
in interest rate, extensions of the loan’s maturity, reductions in the amount of principal
owed by the borrower, or other actions) di stinguishing between each loan product along

Mr. Richard D. Fairbank
Capital One Financial Corporation June 24, 2010
Page 3
with a discussion of your success with these different types of concessions as of both
December 31, 2009 and March 31, 2010.
 4. As a related matter, we note disclosure of s hort-term and long-term modifications on page 19
of your Form 10-Q for the period ended March 31, 2010.  Specifically as  it relates to your
credit card loan modifications and restruct urings which total $663.7 million as of March 31,
2010, please address the following:

• Compare and contrast what you consider a short-term modification from a long-term
modification, with a separate discussion for each  loan product to the ex tent that there are
differences;
• Compare and contrast under what circum stances would you consider any of these
modifications to be temporary in nature or permanent and whether these would be
classified as troubled-debt restructurings.  We note on page 19 of your Form 10-Q for the
period ended March 31, 2010 that you only cons ider a loan modification for which an
economic concession has been granted to be a tr oubled debt restructur ing as compared to
an extension of loan terms for which you e xpect full collection to be a modification;
• Explain whether any loan would revert back to its original terms during any temporary
modification period if consecutive late paym ents are made or if other terms of the
modified agreement are violated.  To furthe r enhance our understanding of this process,
please provide an example with an accompa nying timeline explaining what triggering
events would lead to such a change in status  (classification) and di scuss how these events
would impact the accounting for the loan as we ll as the classification and presentation in
your Guide III data; and
• Additionally, please describe whether th ese loans are included in your ASC 450-20
(SFAS 5) or ASC 310-10 (SFAS 114) impair ment analysis.  If changes in terms,
payments or classification may impact one or  both analysis, please explain how and when
these calculations would be impacted.
Allowance for Loan and Lease Losses, page 60

 5. We note disclosure that duri ng the year you updated your ex pected loss models for your
commercial loans to better reflect recent experien ce. Please tell us and revise future filings to
disclose the following:
• The quarter in which you updated your expect ed loss model, the resulting increase to
your allowance for loan losses during that period, and the expect ed impact to the
allocation of your allowance for loan losses in future periods as a result of this change;
and
• Specifically what changes were made to your expected loss model and how that impacted
the incurred loss record ed during the period.

Mr. Richard D. Fairbank
Capital One Financial Corporation June 24, 2010
Page 4  Table 17: Summary of Allowance for Loan and Lease Losses, page 61

 6. We note your presentation of the allowance for loan losses as a percentage of non-performing
loans ratio. We also note in footnote one to Table 15 on page 59 that your policy is to not classify credit card loans as nonperforming loans and, in footnote two, the alternate measures
of nonperforming loans as a percentage of loan s held for investment excluding the loans
acquired from Chevy Chase Bank that are not considered to be nonperforming.  Given the
fact that a significant amount of  the allowance included in the numerator could be allocated
to loans types that are excl uded from nonperforming loans in the denominator, we believe
that more transparency is needed around your pr esentation of this ratio.  To provide clear and
consistent disclosure, please revise your futu re filings to provide explanatory disclosure
similar to that presented in Table 15 herein  and elsewhere in your filing where you present
the allowance for loan losses as perc entage of non-performing loans ratio.
  Table E - Delinquencies, page 87

 7. We note that footnote three to your table disclo ses that credit cards included in the table
continue to accrue finance charges until charged o ff at 180 days past the statement cycle date.
Given the significant increase in  your credit card loans upon the consolidation of your credit
card securitization as of January 1, 2010, please expand your disclosure in future filings to
separately present loan delinquencies in each respective bucket for your credit card loans and
other significant categories of delinquent loans.

Table G – Nonperforming Assets, page 88

8. We note that non-performing commercial and multi -family real estate loans have increased
significantly as of December 31, 2009 as compared  to the prior year.  Please tell us and
revise your future filings to di sclose whether you have perfor med any commercial real estate
workouts whereby an existing loan was restruct ured into multiple new loans (i.e., A Note/B
Note structure).  To the extent that you have performed these types of these workouts, please
provide us with and revise your future filings to disclose the following:

• Quantify the amount of loans that have been restructured using this type of workout
strategy in each period presented;
• Discuss the benefits of this workout strate gy, including the impact on interest income and
credit classification;
• Discuss the general terms of  the new loans and how the A note and B note differ,
particularly whether the A note is underw ritten in accordance with your customary
underwriting standards and at  current market rates;
• Clarify whether the B note is immediately charged-off upon rest ructuring.  If not, clarify
whether you combine the restructured notes in your evaluation of whether the notes
should be returned to accrual status;

Mr. Richard D. Fairbank
Capital One Financial Corporation June 24, 2010
Page 5
• Confirm that the A note is classified as a TDR and explain your policy for removing such
loans from TDR classification; and
• Clarify your policy for returning the A note to  accrual status, including how you consider
the borrower’s payment performan ce prior to the restructuring.

9. As a related matter, please tell us and consid er revising your future filings to disclose,
whether you have noticed an increase in any loan  categories such as commercial real estate
or construction loans that have been extended at maturity for which you have not considered
the loans to be impaired due to the existen ce of guarantees.  If so, provide us with the
following information and consider enhancing your  disclosure in future filings accordingly:

• The types of extensions being made, whethe r loan terms are being adjusted from the
original terms, and whether you consider thes e types of loans as collateral-dependent;
• To the extent you extend commercial loans at or  near maturity at the existing loan rate
due to the existence of a guarantee, tell us how  you consider whether it is a troubled debt
restructuring;
• In detail, how you evaluate the financial wh erewithal of the guar antor, addressing the
type of financial information reviewed, how current and objec tive the information
reviewed is, and how often th e review is performed;
• How many times you have sought performance u nder the guarantee di scussing the extent
of the successes.  As part of your respons e, discuss the decision making process you go
through in deciding whether to pursue the guarantor and whether there are circumstances
you would not seek to enforce the guarantee; and
• Quantify the dollar amount of commercial loan s in which your carrying value is in excess
of the appraised value but not considered impa ired due to the existence of guarantees.

 Note 1. Significant Accounting Policies

 Loans Held for Sale, page 104

 10. We note disclosure that during 2009 you cl assified $127.5 million of your small ticket
commercial real estate portfo lio as available for sale a nd recognized a write-down of $79.5
million.  We note that this portfolio is currently in run-off mode and as a result the balance in
this portfolio has decreased from $2.6 billi on as of December 31, 2008 to $2.1 billion as of
December 31, 2009 in addition to disclosure on page 58 that charge-offs in your commercial
banking segment has increased due in part to  your small ticket commercial real estate
portfolio. Please tell us how you determined these specific loans to sell (i.e. credit
deterioration, liquidity, acceler ation of portfolio run-off, etc.), whether these loans were
considered nonperforming and had any associated  allowance for loan losses prior to transfer,
and your plans in the future to transfer any ad ditional loans from this portfolio to available
for sale.

Mr. Richard D. Fairbank
Capital One Financial Corporation June 24, 2010
Page 6  Note 11. Deposits and Borrowings, page 133

11. We note your disclosure related to your shor t term borrowings through resale agreements.
Please tell us and revise your future filings to disclose your accounting policies related to
your resale agreements.  If you account for any as  sales, please clearly state this, and tell us
the accounting guidance on which you rely for this tr eatment.  Please tell us and revise future
filings to quantify the amount sold at each bala nce sheet date and the average amount sold for
the periods presented.

Note 21. Commitments, Contingencies and Guarantees, page 161

12. We note disclosure of the various litigation ma tters that you are exposed to.  We also note
that in the majority of  these situations, you have  not disclosed either:
(i)     the possible lo ss or range of loss; or
(ii)    a statement that an estimate of the loss cannot be made.
ASC 450 (formerly SFAS 5) indicates that if an  unfavorable outcome is determined to be
reasonably possible but not probabl e, or if the amount of loss cannot be reasonably estimated,
accrual would be inappropriate, but disclosure must be made regarding the nature of the
contingency and an estimate of the possible loss or  range of possible loss or state that such an
estimate cannot be made.  Additionally, we note th at in instances where an accrual may have
been recorded as all of criteria in ASC 450-20-25-2 have been met, you have not disclosed the amount of the accrual which may be necessary  in certain circumstances for the financial
statements not to be misleading, nor has there been disclosure indica ting that there is an
exposure to loss in excess of the amount accrued and what the additional loss may be for
each particular litigation matter.  Please revise your disclosures beginning in your next Form
10-Q to include all of disclosures required by paragraphs 3-5 of AS C 450-20-50.  In this
regard, we do not believe that general boilerp late disclosure indicat ing that losses may be
higher than reserves currently accrued or disclosure indicatin g that the outcome of a matter
may be material to your operating results for a particular period satisf ies the criteria in ASC
450.
 Form 10-Q for the quarterly period ended March 31, 2010

 Table 12: Allocation of the Reported Allowa nce for Loan and Lease Losses, page 22

 13. We note that as a result of adopting the new consolidation accounting standards on January 1, 2010, you consolidated approximately $41.9 billion of assets, consisting primarily of credit c