Capital One Says New Bankruptcy Law will Swell Q4 Charge-offs

By James B. Kelleher, Reuters

Capital One Financial Corp. said on Wednesday that the losses it experienced last quarter as a result of a new U.S. bankruptcy law will spill into the fourth quarter because of a surge in last-minute filings by consumers taking advantage of the expiring law's more lenient provisions.

In a U.S. Securities and Exchange Commission filing, the McLean, Virginia-based company, a leading issuer of credit cards, said it expected its so-called "charge-off rate" to rise somewhere between half a percentage point and a full percentage point in the fourth quarter to 5 percent of total receivables. That would be up from 4.14 percent in the third quarter, 4.10 percent in the second quarter and 4.05 percent in the third quarter of 2004.

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