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Congresswoman Waters, Senator Hawley Oppose Capital One-Discover Deal

Democrat Congresswoman Maxine Waters has called on banking regulators to block the $35.3 billion planned acquisition of Discover Financial by Capital One Financial.

Waters, D-Calif., said Wednesday (Feb. 21) that she is “deeply opposed” to the deal, citing concerns about the concentration of economic power in the hands of megabanks, Reuters reported Wednesday.

If the merger were to go through, Capital One and Discover would become the top players in the U.S. credit card market, with a combined market share of 22% and around $250 billion in card balances, according to the report.

Waters highlighted the potential risks of such a merger, stating that the resulting $625 billion bank would be larger than the combined size of three banks that failed last year, per the report. She emphasized the need to prevent the destabilization of the banking system and protect consumers, small businesses, and communities across America.

Separately, Sen. Josh Hawley, R-Mo., also called for the deal to be blocked.

In a press release issued Wednesday, Hawley condemned the merger and called for the deal to be blocked. He said: “Sounds like the credit card companies finding another way to screw the American people. This merger should be blocked — and Congress ought to cap credit card rates pronto.”

Experts in corporate law believe that Capital One’s chances of securing regulatory approval for the deal hinge on its ability to disrupt the close-knit U.S. credit card industry, according to the Reuters report.

Capital One said Monday (Feb. 19) that it aims to acquire Discover Financial in an all-stock transaction, valued at $35.3 billion, that will create a global payments platform with 70 million merchant acceptance points in more than 200 countries and territories.

“Our acquisition of Discover is a singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies,” Richard Fairbank, founder, chairman and CEO of Capital One said in a Monday press release.

“Through this combination, we’re creating a company that is exceptionally well-positioned to create significant value for consumers, small businesses, merchants and shareholders as technology continues to transform the payments and banking marketplace.”