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Senator Warren Urges Regulators to Halt Capital One’s Acquisition of Discover

 |  February 20, 2024

In a bid to halt what she terms a “dangerous” move in the financial landscape, Senator Elizabeth Warren (D-MA) has called upon federal regulators to intervene and prevent Capital One’s acquisition of its competitor, Discover.

The proposed all-stock deal, announced on Monday, carries a staggering price tag of $35 billion, potentially resulting in the formation of the largest U.S. credit card company by loan volume. While the news triggered a surge in Discover’s shares, Senator Warren and others have raised concerns about the anti-competitive implications of such a merger.

“The merger of [Capital One] and [Discover] threatens our financial stability, reduces competition, and would increase fees and credit costs for American families,” Warren voiced her apprehensions on social media. “This Wall Street deal is dangerous and will harm working people. Regulators must block it immediately.”

The fate of the merger now lies in the hands of regulators under the Biden administration, who have signaled a prioritization of antitrust concerns. When pressed for comment on the matter, the White House referenced remarks made by Lael Brainard, Director of the National Economic Council, during a recent appearance on CNBC.

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Though Brainard refrained from discussing the Capital One-Discover deal specifically, she underscored President Joe Biden’s staunch commitment to fostering competition within the United States.

“While I can’t speak about the Capital One-Discover deal specifically, President Biden is very committed to restoring competition across the landscape in the United States,” Brainard stated. “For too long, we saw a lot of consolidation, which did not have benefits but rather came at some cost. And so, we’ve really seen a reinvigoration of the commitment to competition, which levels the playing field for small businesses.”

With Senator Warren’s vocal opposition and the Biden administration’s emphasis on promoting competition, the proposed merger faces an uphill battle as it navigates through regulatory scrutiny in the coming days.

Source: Chat OpenAI