Congresswoman Waters Urges Regulators to Reject Capital One-Discover Merger

Congresswoman Maxine Waters (D-Calif.) reiterated her opposition to the proposed Capital One–Discover merger.

Waters, the top Democrat on the House Financial Services Committee (HFSC), testified against the proposed merger Friday (July 19) during a virtual meeting convened by the Federal Reserve and the Office of the Comptroller of the Currency (OCC), according to a Friday press release.

In her remarks, Waters said the proposed merger must be rejected because it fails three tests that the law requires regulators to consider when it comes to mergers: the merger’s impact on competition, financial stability and the convenience and needs of communities.

“Post-merger, consumers may have to pay more for Capital One’s credit cards,” Waters said, citing the Consumer Financial Protection Bureau’s (CFPB) findings that the largest card issuers charge consumers higher interest rates and annual fees than smaller issuers.

“There are also vertical integration concerns with this merger,” Waters said, adding that if Capital One were to control its own card network, it could set prices for credit card customers and merchants.

“Moreover, there are serious financial stability concerns,” Waters said, noting that the merger would result in a $625 billion bank that would be about $100 billion larger than the combined size of the three banks that failed in 2023.

“In closing, the Fed and the OCC must stop rubber stamping mergers,” Waters said in her remarks. “I urge you to follow the law and reject this merger.”

Capital One and Discover announced the planned acquisition on Feb. 19, saying it will create a global payments with 70 million merchant acceptance points in more than 200 countries and territories.

Two days later, on Feb. 21, Waters called on banking regulators to block the planned deal, saying that she is “deeply opposed” to it and concerned about the concentration of economic power in the hands of megabanks.

Waters’ latest remarks on the proposed merger come three days after Capital One announced a $265 billion community benefits plan that it developed with four community groups and said that a combination of the bank with Discover would provide more benefits to underserved communities than the organizations would offer separately.