The US Department of Justice has approved the $35 billion merger between Capital One Finance Group and Discover Financial Services.
A confidential memo sent to regulators indicated that there was insufficient evidence to obstruct the deal. This memo was addressed to the Federal Reserve and the Office of the Comptroller of the Currency, which need to authorize the merger for it to proceed.
An earlier version of the memo, drafted in January during the Biden administration, suggested that the merger could potentially harm competition, especially for first-time credit card holders. It also raised concerns that Capital One would leverage the deal to bypass interchange fees on its debit cards. However, the new antitrust division, led by Chief Gail Slater, concluded there wasn’t enough evidence to challenge the merger.
A spokesperson for Capital One stated, “Our deal with Discover Financial complies with the Bank Merger Act’s legal requirements, and we remain well-positioned to gain approval.”
In February 2025, stockholders from both Capital One and Discover approved the deal.
This controversial merger sheds light on the DOJ’s approach to bank consolidations under the current administration and highlights the competitive dynamics that may influence future transactions.