The Federal Reserve is holding three public hearings to address too-big-to-fail concerns stemming from Capital One's (COF) plan to acquire ING Direct USA for $9 billion, creating the nation's fifth largest bank by deposits. By assets, the merged entity would become the seventh largest financial institution. The Fed said Monday it will accept open comments on the proposed merger through Oct. 12. The board plans to weigh several factors to ensure the new banking entity formed by the transaction functions without disrupting the financial markets. "These factors are whether the acquisition can be expected to produce benefits to the public, such as greater convenience, increased competition, and gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, unsound banking practices, and risk to the stability of the U.S. banking or financial system," the Fed said in a statement. Capital One, which maintains a small home loan footprint, is defending the plan, which would have the firm assume 20% of ING Direct USA's portfolio of Alt-A mortgages. "We will remain a traditional bank with only 1.5% of deposits nationwide and none of the complexity that the Dodd-Frank reform bill addressed in ending too big to fail," said Patrick Mendoza, a spokesman for Capital One. "In each of our prior bank acquisitions, we have substantially increased our investments that serve lower income communities, providing $2.2 billion over and above those predecessor banks in their footprints.  The record includes scores of letters of support from community groups attesting to this fact." The first Fed hearing on the merger will be held Sept. 20, in Washington D.C., followed by hearings in Chicago and San Francisco on Sept. 27 and Oct. 5, respectively. Write to: Kerri Panchuk.