Proposed Deal Would Make Capitol One the Nation’s 6^th Largest Bank, Largest Credit Card Issuer

“This merger is bad for consumers…In addition to harming consumers and small businesses, bank consolidation poses increased systemic risk in the financial system.”

Text of Letter (PDF)

WASHINGTON – U.S. Representative Ayanna Pressley (MA-07), a member of the House Financial Services Committee, joined U.S. Senator Elizabeth Warren (D-Mass.), a member of the Senate Banking, Housing, and Urban Affairs Committee, U.S. Representative Alexandria Ocasio-Cortez (D-N.Y.), the Vice Ranking Member of the House Committee on Oversight and Reform, and U.S. Representatives Katie Porter (D-Calif.), James McGovern (D-Mass.), Ro Khanna (D-Calif.), Greg Casar (D-Texas), Summer Lee (D-Pa.), Sylvia Garcia (D-Texas), Rashida Tlaib (D-Mich.), Jamaal Bowman (D-N.Y.), Jesus G. “Chuy” Garcia (D-Ill.), and Al Green (D-Texas) in urging the Office of the Comptroller of the Currency (OCC) and the Federal Reserve (Fed) to block Capital One’s plan to acquire Discover Financial Services (Discover). The letter also expressed concerns with the OCC’s proposed policy statement regarding merger approvals as essentially codifying a permissive approach.

“To protect consumers and financial stability, we urge you to block this merger and strengthen your proposed policy statement to prevent harmful deals in the future,” wrote the lawmakers.

The potential merger, which would combine two of the largest credit card issuers in the United States, would consolidate the credit card market, create the nation’s sixth largest bank, and limit customer choice. The banking and credit card industries are already highly concentrated: today, the six largest bank holding companies control more assets than all other bank holding companies combined.

“This merger announcement comes less than a week after the Consumer Financial Protection Bureau (CFPB) issued a new report revealing the impact of credit card industry consolidation on consumers,” the lawmakers wrote. “According to the report, large banks charge higher interest rates than small credit card issuers, with ‘[n]early half of the largest credit card issuers’ — including Capital One — ‘offering cards with a maximum purchase APR over 30%.’” The CFPB report also found that large credit card issuers charge average fees that are 70% higher than those charged by small institutions.

Additionally, Capital One and Discover have concerning track records of mistreating customers and compliance failures. The lawmakers noted that in 2012, the CFPB ordered Capital One to refund $140 million to 2 million consumers with low credit scores and low credit limits who were misled into paying for costly add-on products. In 2023, Discover was required by the Federal Deposit Insurance Corporation (FDIC) to address “‘violations of, and consumer harm related to’ various consumer financial laws.”

The lawmakers requested that regulators strengthen their review language to ensure that future mergers do not harm consumers and the broader economy, and specifically addressed OCC Acting Comptroller Michael Hsu, who has remarked on the need to scrutinize merger applications to prevent large banks from becoming unmanageable.

The full text of the letter is available here.

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