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Major Credit Card Company Announces Mega Acquisition As Debt Continues To Strangle Americans

As Americans continue to struggle with credit card debt, Capital One announced Monday that it will acquire a rival financial services company in a major stock deal, according to the New York Times.

The McLean, Virginia-based bank announced it would acquire Discover Financial Services in a $35.3 billion all-stock deal, The New York Times reported. report. The Discover acquisition would further increase Capital One’s market power as consumer credit card debt continues to rise and Discover has its own payments network. according to To the Wall Street Journal. (Related article: Wall Street’s top economist offers grim predictions about future recession)

The New York Times reported that the deal could face major hurdles from federal regulators.Comptroller of the Currency announced I wanted to do that slow down Process to approve mergers and acquisitions on January 29th.

“It is very difficult to imagine how federal regulators would allow Capital One to acquire Discover, given the requirement that the merger benefit not only insiders but also the public.” Jesse Van Tol, president and CEO of the National Community Reinvestment Coalition, told The New York Times.

If regulators approve the deal, Discover shareholders will receive just under 102 Capital One shares for every 100 Discover shares, a 26% premium to the company’s closing stock price.

The deal comes as Americans’ total household debt reached $17.5 trillion in the fourth quarter of 2023. Credit card delinquency rates of 90 days or more rose to 6.36% at the end of 2023, and total credit card debt increased to $1.13 trillion. according to to the Federal Reserve Bank of New York.

“Delinquency rates for credit card and auto loans remain above pre-pandemic levels,” New York Fed advisor Wilbert van der Klaue said in a statement. “This indicates increased financial stress, especially among young people and low-income households.”

Capital One and Discover did not immediately respond to requests for comment from the Daily Caller News Foundation.

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