Capital One-Discover Merger Approved: Consumers Fear Reduced Competition
Capital One’s acquisition of Discover Financial Services has been approved by the Federal Reserve and the Office of the Comptroller of the Currency, subject to Capital One addressing past Discover enforcement actions. This all-stock merger significantly boosts Capital One’s market share in the credit card industry, challenging competitors like JPMorgan Chase and Bank of America. While potentially increasing merchant acceptance for Discover customers, the merger also raises concerns about higher interest rates, particularly for subprime borrowers who comprise a significant portion of Capital One’s customer base. The approval comes despite a $100 million penalty levied against Discover for past interchange fee overcharges.
John Q. Hosedrinker