The Federal Reserve on Tuesday approved Capital One Financial Corp's bid to acquire ING Groep NV's U.S. online banking unit in what would be the biggest U.S. bank acquisition since the Dodd-Frank financial reform law of 2010.
All five Fed governors voted in favor of the deal.
Capital One announced plans last year to buy online deposit-taker ING Direct for $8.9 billion in a deal that generated concern from consumer groups who have argued it would create another "too big to fail" bank.
As part of its approval, the Fed is requiring Capital One to increase its ability to monitor for internal risk due to "the size, complexity, and diversification of the business lines" that will result from the deal.
Capital One shares rose 2.8 percent to $49.33 in after-hours trade within minutes of the announcement. The shares had dropped 1.1 percent to $47.98 during the regular trading day.
The Fed said the deal will make Capital One the fifth-largest U.S. bank, as measured by deposits. (Reporting By Alexandra Alper and Mark Felsenthal; Editing by Tim Dobbyn)