The US Department of Justice has cleared the $35 billion merger between Capital One Finance Group and Discover Financial Services.
A confidential memo to regulators revealed that there was not sufficient evidence to block the deal. The memo went to the Federal Reserve and Office of the Comptroller of the Currency, both of which must sign off on the deal for it to move forward.
An earlier version of the memo that was drafted in January under the Biden administration indicated that the merger could harm competition, particularly first-time credit card holders, and that Capital One would use the deal to avoid interchange fees for its debit cards. However the new antitrust division, headed by chief Gail Slater, stated there was not enough evidence to challenge it.
A Capital One spokesperson commented: “Our deal with Discover Financial complies with the Bank Merger Act’s legal requirements and we remain well-positioned to gain approval.”
In February 2025, Capital One and Discover stockholders approved the deal.
This controversial move offers insight in how the DOJ will manage bank deals under the new administration, and how competitive factors will impact future mergers.