Credit card regulators approve Capital One and Discover merger – Washington Examiner
The Federal Reserve’s board of Governors adn the Office of the Comptroller of the Currency have approved a $35 billion merger between Capital One and Discover Financial Services. This decision is expected to pave the way for additional mergers, influenced by the favorable business consolidation atmosphere promoted by the Trump administration. The merger, announced over a year ago, will significantly expand Capital One’s assets to more than $650 billion, with the deal anticipated to close by May. While it may enhance merchant acceptance rates for Discover, which serves customers with lower credit scores, there are concerns about the potential for increased credit card interest rates for its customers. Additionally, as part of the agreement, Capital One must adhere to a consent order related to Discover’s previous overcharging of certain fees.
Credit card regulators approve Capital One and Discover merger
Capital One’s merger with Discover Financial Services in a $35 billion deal was approved by the Federal Reserve’s Board of Governors and the Office of the Comptroller of the Currency.
The merger’s approval will likely encourage more deals, which was predicted due to President Donald Trump’s largely friendly nature toward business consolidation.
“Our sense was that several executives were watching how the Capital One-Discover process transpired,” said Barclays analyst Jason Goldberg, suggesting financial leaders have been eager to see how the Trump administration responded to mergers.
The all-stock deal was announced more than a year ago and would lead Capital One to have more than $650 billion in assets. Capital One said it expects to close the deal by May.
CREDIT UNIONS BIG AND SMALL HELP PEOPLE SUCCEED FINANCIALLY
Discover, which caters to customers with subprime credit scores in the 600s range, will likely see an increase in merchant acceptance rates. However, there’s also concern that customers could face higher credit card interest rates.
As part of the deal, Capital One will have to comply with Discover’s consent order, where the company was given a $100 million penalty “for overcharging certain interchange fees from 2007 through 2023.” The company is repaying those fees to the affected customers.
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
*As an Amazon Associate I earn from qualifying purchases
Now loading...