Several Democratic lawmakers on Sunday urged the Biden administration to block the planned merger of Capital One and Discover Financial Services, saying it would consolidate the credit card market and limit consumer choice.
Sen. Elizabeth Warren (D-Mass.) and 12 House Democrats said the $35.3 billion merger would elevate Capital One from its status as the nation’s ninth-largest bank to its sixth-largest bank and make it the nation’s largest. He pointed out that it would be a credit card. Issuer.
“This merger is bad for consumers,” the group said in a letter to Michael Barr, the Federal Reserve’s vice chairman for oversight, and Michael Hsu, acting comptroller. .
“To protect consumers and financial stability, we urge you to block this merger and strengthen the proposed policy statement to prevent future harmful transactions,” they added.
The 13 Democratic senators argued that banking sector consolidation would lead to higher prices, higher fees for consumers and increased systemic risk to the financial system.
They also suggested that Capital One has a “concerning history of mistreating consumers,” while Discover has a “history of non-compliance.”
“On its face, this merger has significant flaws,” Warren and his colleagues wrote in the letter.
Lawmakers called on Biden officials to block the merger and called on Hsu’s Office of the Comptroller of the Currency (OCC) to strengthen its draft policy statement on mergers.
They argued that a statement issued by the OCC last month codifies “the current permissive approach to bank mergers” that “has failed to protect consumers and the financial system for decades.” .
Senate Banking Committee Chairman Sherrod Brown (D-Ohio) did not join Sunday’s letter, but said that given the potential size of the Capital One-Discover merger, “regulators should “We need to ensure that our financial system remains strong and competitive,” he said last week.
“Rubber-stamp mergers that make powerful financial companies even bigger and more powerful do no good for families,” Brown said in a statement.
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