A Capital One–Discover Merger is Capital D Dangerous for the U.S. Financial System and American Consumers

February 20, 2024 Press Release

Washington, D.C. — In response to news that Capital One is attempting to acquire Discover Financial Services for $35.3 billion, the American Economic Liberties Project released the following statement.

“The Capital One—Discover deal will create another colossal too-big-to-fail bank while supercharging consolidation in the credit card sector,” said Shahid Naeem, Senior Policy Analyst at the American Economic Liberties Project. “Greenlighting the creation of the nation’s sixth-largest bank and the largest credit card issuer is indefensible, particularly as the harms of bank and credit card consolidation are already causing enforcers and Congress to chart a stricter approach to both. It’s time for bank regulators to step up and do their jobs to protect the safety and stability of the financial system, the economy, and the American consumer—starting with blocking this deal.”

The combination of Capital One, a bank and credit card issuer, with Discover — a bank, credit card issuer, and credit card network — would create the sixth-largest U.S. bank by assets and the nation’s largest card issuer by loan volume. Capital One’s purchase of the Discover credit card network, a smaller but important competitor to the Visa-Mastercard card network duopoly, would also allow Capital One to vertically integrate and maximize critical swipe fee revenue at a time when high swipe fees are under Congressional scrutiny.

Discover’s management and regulatory failures are well-known, raising further questions about the safety of any prospective merger. The FDIC recently determined that Discover engaged in “unsafe or unsound banking practices” after a probe, and the bank has been the target of multiple CFPB consent orders for violating consumer protection laws.

The deal is expected to receive intense scrutiny from bank regulators, who were directed by President Biden in a 2021 Executive Order to crack down on bank consolidation and have struggled to manage fallout from a series of bank failures and emergency acquisitions in 2023. The deal will also be reviewed by antitrust enforcers at the Justice Department, who have released new merger guidelines and are also working to strengthen bank merger policy.

Just last week, the Consumer Financial Protection Bureau found that the nation’s largest banks exploit their dominance to charge 8-10% higher credit card interest rates than smaller financial institutions.

Read “Revitalizing Bank Merger Enforcement To Restore Competition and Fairness in Banking,” here.

Read “Myth vs. Fact: The Credit Card Competition Act of 2023,” here.

Learn more about Economic Liberties here


The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.