Capital One Financial Corp.'s (BB+/Negative/—) announcement that it anticipates entering a Memorandum of Understanding (MOU) (an MOU is not considered a formal enforcement action) with its regulators will have no immediate effect on Standard&Poor's outstanding ratings on the company or on its subsidiaries, but does change the rationale for its negative outlook somewhat. The nature of the MOU appears to be that of a precautionary warning, and does not address anything that could be considered irreparably wrong. The primary stipulation of the MOU deals with industrywide implementation of new and anticipated regulatory guidelines relating to increased capital and reserves associated with its subprime lending business, incremental capital for certain finance charge and fee receivables related to securitized credit
