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Several Democratic lawmakers have called on the Biden administration to halt the proposed merger between Capital One and Discover Financial Services, citing concerns over market consolidation and reduced consumer choice.
Senator Elizabeth Warren (D-MA) and twelve House Democrats expressed their apprehension in a letter to Federal Reserve Board Vice Chair Michael Barr and Acting Comptroller Michael Hsu, stating, “This merger is bad for consumers.” They highlighted that the $35.3 billion deal would significantly elevate Capital One’s position in the banking industry, making it the largest credit card issuer in the United States.

The group of lawmakers argued that the merger would lead to diminished competition, resulting in higher costs and more consumer fees, and pose a greater systemic risk to the financial system. They pointed out Capital One’s “concerning history of mistreating consumers” and Discover’s “record of compliance failures” as additional reasons for their opposition. “This merger, on its face, has significant deficiencies,” Warren and the other Democrats added in their letter.
Beyond urging the blockage of this specific merger, the Democrats also called for a strengthening of the Office of the Comptroller of the Currency’s (OCC) proposed policy statement on mergers, criticizing it for perpetuating a lenient stance on bank consolidations that they believe has historically failed consumers and the financial system. Although Senate Banking Committee Chair Sherrod Brown (D-Ohio) did not sign the letter, he echoed similar sentiments last week, emphasizing the need for a financial system that remains robust and competitive, cautioning against mergers that further empower large financial entities at the expense of consumers.