Washington, D.C. — In response to a report that the Department of Justice Antitrust Division will decline to challenge Capital One’s proposed $35 billion acquisition of Discover Financial Services, the American Economic Liberties Project released the following statement.

“If the Trump Administration greenlights the Capital One-Discover merger, it will be a betrayal of working class Americans and small businesses,” said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “If the deal goes through, Capital One will become the largest credit card lender in the country, the first major issuer in decades to control its own payments network, and entrench its striking dominance in subprime credit card lending. Allowing Capital One to get even bigger—after cheating customers out of billions in interest payments—will further insulate it from competition and raise costs for Americans and Main Street businesses.”

“It’s almost impossible to believe the Antitrust Division could not recognize the clear competition concerns at play here,” Harper added. “But if that’s true, it’s incumbent upon banking regulators at the Federal Reserve and OCC to block the Capital One-Discover merger to protect competition, consumers, and financial stability.”

The combination of Capital One, a bank and credit card issuer, with Discover — a bank, credit card issuer, and credit card network — would create the sixth-largest U.S. bank by assets and the nation’s largest card issuer by loan volume, with more than $200 billion in outstanding debt. It would also give Capital One control roughly one-third of the subprime market, eliminating important alternatives for consumers already facing high fees and limited credit options. Capital One’s purchase of the Discover credit card network, a smaller but important competitor to the Visa-Mastercard card network duopoly, would also allow Capital One to vertically integrate and maximize critical swipe fee revenue at a time when high swipe fees are already squeezing small businesses.

Both companies have histories of alleged illegal conduct, including deceptive marketing, abusive debt collection, and rate manipulation. The CFPB in January filed a lawsuit against Capital One for cheating customers out of more than $2 billion in interest payments—many of whom who were victims of its previous mergers. The lawsuit was recently dropped the Trump administration.

Read “Capital One-Discover: A Competition Policy and Regulatory Deep Dive” to learn more. 

Learn more about Economic Liberties here.