The merger between Capital One and Discover has been approved by U.S. bank regulators, including the Federal Reserve and the Office of the Comptroller of the Currency. This deal, which was closely monitored by financial executives as a benchmark for the speed of merger approvals under President Donald Trump’s administration, will create the largest U.S. credit card issuer by balances. It will also give Capital One control over Discover’s extensive card payment network. The combined entity will rank as the eighth-largest bank covered by government deposit insurance, holding approximately $637.8 billion in assets, which equates to 2.2% of the nation’s insured deposits. Both companies announced that all necessary regulatory approvals have been secured, with the deal set to close on May 18. Michael Shepherd, interim CEO and president of Discover, stated that the combination will enhance competition in payment networks, expand product offerings, increase resources for innovation and security, and provide significant community benefits. Critics, such as Better Markets, argue that the merger will reduce competition, limit consumer choice, and result in higher fees. Regulatory approval from the OCC is contingent upon corrective actions addressing any outstanding enforcement issues against Discover. Additionally, Discover faces a $100 million fine from the Fed and a $150 million civil fine from the Federal Deposit Insurance Corporation for overcharging fees between 2007 and 2023.
— new from Reuters