A planned merger between Capital One Financial Corp (NYSE:COF) and Discover Financial Services (NYSE:DFS) has been met with sharp criticism from Democratic lawmakers and consumer advocacy groups. They caution that the merger could result in a decrease in competition and an increase in customer costs.
What Happened: The merger announcement by Capital One was swiftly followed by a backlash. The bank intends to purchase Discover Financial Services in an all-stock transaction valued at $35.3 billion. The deal, subject to approval from regulatory bodies and both companies’ shareholders, could be finalized as soon as late 2024, The Hill reported on Tuesday.
Chair of the Senate Banking Committee, Sherrod Brown (D-Ohio), emphasized the necessity of a vigorous and competitive financial system. He voiced concerns about the potential rise in power for financial corporations.
"With a merger this size, the regulators need to ensure our financial system remains strong and competitive, so that consumers continue to have access to safe, affordable financial products and services," said Brown.
"A rubber-stamped merger that makes powerful financial companies even bigger and more powerful will do nothing for families," he added.
Sen. Elizabeth Warren (D-Mass.), also urged regulators to block the merger, highlighting the risks to financial stability and customer costs.
The merger of @CapitalOne and @Discover threatens our financial stability, reduces competition, and would increase ...