New York Attorney General Letitia James is investigating whether the proposed acquisition of Discover Financial Services DFS through Capital One 
COF valued at $35.3 billion violates state antitrust laws.
James asked a Manhattan judge on Wednesday to order Capital One to produce documents it needs for its investigation, citing the bank’s alleged lack of cooperation.
James said a merger could have a significant impact in New York, as Capital One and Discover have $9.5 billion and $6.5 billion, respectively, in credit card loans there.
She also said the impact of a merger would be “particularly felt for New Yorkers who are often vulnerable and have substandard credit.”
Capital One, based in McLean, Virginia, is one of the largest US banks with total assets of $480 billion as of June 30. It is expected to report its third-quarter results on Thursday.
Discover, based in Riverwoods, Illinois, reported 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 was “well positioned” to receive approval from banking regulators for the merger.
“We have convincingly demonstrated the pro-competitive and consumer-friendly benefits of this transaction,” it said.
Discover did not immediately respond to requests for comment.
The all-stock merger announced in February would create the largest U.S. credit card issuer with more than $250 billion in outstanding credit, JPMorgan Chase 
JPM outperforms and has access to more than 305 million cardholders.
James said the merger would expand Capital One’s lead as the largest U.S. issuer of subprime cards and give the combined company more than 30 percent market share.
A merger would also help Capital One, which issues Visa and Mastercard-branded cards, expand its payments business.
The merger also requires approval from shareholders, the Justice Department and the Federal Trade Commission. Capital One and Discover hope to complete the merger by early 2025.
James said her office asked Capital One and Discover in May to waive confidentiality so it could review documents they submitted to the Justice Department’s Antitrust Division.
Discover agreed to a full waiver, but Capital One did not because it would give New York unlawful “visitor power” over national banks, which led to the subpoena, James said.
Customers have also sued (link) Capital One and Discover, claiming the merger would reduce competition and drive up costs for consumers.
