New York State Attorney General Letitia James is investigating whether Capital One’s $35.3 billion takeover of Discover Financial Services violates New York antitrust law.
On Wednesday, Ms. James asked a Manhattan judge to subpoena Capital One for documents needed for her investigation, citing the bank’s alleged lack of cooperation.
Ms. James said a merger could have a big impact in New York because Capital One and Discover hold more than $9.5 billion and $6.5 billion in credit card loans there, respectively.
She also said that the impact of a union “would be particularly felt by New Yorkers who are often vulnerable and have subprime credit scores. “
Capital One, headquartered in McLean, Virginia, is one of the largest banks in the US, with $480 billion in assets as of June 30. It is scheduled to present its third quarter results on Thursday.
Discover, headquartered in Riverwoods, Illinois, reported a third-quarter profit of $965 million last week.
Capital One said in a statement that it would respond to James through the appropriate legal channels and that it was “well positioned” to obtain approval of the merger from federal banking regulators.
“We have made a strong case for the benefits of this transaction to competition and consumers,” Capital One said.
Discover did not immediately respond to requests for comment.
The merger, announced in February, would create the largest US credit card issuer, with more than $250 billion in outstanding loans, surpassing JPMorgan Chase, and access to more than 305 million cardholders.
Mr. James said the merger would strengthen Capital One’s position as the leading subprime card issuer in the United States and would give the combined company a market share of more than 30 percent.
The merger would also help Capital One, which provides Visa and Mastercard, expand its payments business.
The merger must also be approved by shareholders, the Federal Reserve and the Office of the Comptroller of the Currency. Capital One and Discover said they hope to close the merger by early 2025.
Ms. James said her office in May asked Capital One and Discover to waive confidentiality so they could review the documents they submitted to the antitrust division of Dept. of Justice.
Discover agreed to a full exemption, but Capital One did not, saying it would give New York illegal “visiting power” over national banks, leading to a subpoena, Ms. James said.
Consumers also sued Capital One and Discover, saying the merger would reduce competition and increase costs for consumers.
2024-10-26 03:38:00
#York #examines #legality #Capital #OneDiscover #merger
