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Dive Brief:
- The Federal Reserve Board and the Office of the Comptroller of the Currency will hold a virtual meeting July 19 to allow public comment on Capital One Financial’s proposed $35.3 billion acquisition of Discover Financial Services, the regulators said in a press release Tuesday.
- “The purpose of the public meeting is to collect information from a wide range of stakeholders as the agencies evaluate the applications,” the federal agencies said in their announcement.
- Issues to be considered as part of the meeting include the effects of the merger on the communities that the banks serve; competition in the markets they serve; the impact of the merger on the U.S. financial system; and the companies’ effectiveness in fighting fraud, according to the meeting notice.
Dive Insight:
McLean, Virginia-based Capital One announced its proposed acquisition of Riverwoods, Illinois-based Discover in February in a bid to create the largest credit card issuer in the U.S., displacing rival JPMorgan Chase from that position. The deal was expected, from the beginning, to draw significant antitrust scrutiny.
Some Democrats in Congress immediately called on the federal government to block the merger, saying it would harm consumers and the financial system.
“To protect consumers and financial stability, we urge you to block this merger and strengthen your proposed policy statement to prevent harmful deals in the future,” the group of 13 lawmakers wrote in a Feb. 25 letter to the agencies.
In March, 30 advocacy organizations, including Consumer Reports, U.S. PIRG, the Consumer Federation of America and the National Community Reinvestment Coalition, urged bank regulators and the Department of Justice’s top antitrust official to provide for transparency throughout their review of the proposed acquisition. They also expressed concerns about the transaction, noting in a letter to regulators that it would increase the banks’ “market power.”
By contrast, congressional Republicans have been eager to see federal regulators consider bank mergers in a more expeditious way. To that end, one House member has introduced a bill that aims to curtail the amount of time banks wait for a regulatory response on merger applications.
“We welcome the opportunity to further discuss how a combined Capital One and Discover will jumpstart competition in the payment network space, and build on our customer-first legacy – delivering positive benefits to consumers, merchants, and our communities,” Capital One said in an emailed statement.
While the July meeting will be open to the public, people seeking to present at it will need to register by June 28 through an online registration website, the notice said. The agencies also extended until July 24 the period through which public comment can be submitted.
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