Capital One Financial Corp.’s proposed $35 billion acquisition of Discover Financial Services has received a significant boost, with the U.S. Department of Justice (DOJ) reportedly concluding its antitrust review without raising objections.
According to The New York Times, the DOJ has informed relevant regulatory bodies that it does not see sufficient competition concerns to warrant blocking the deal.
The DOJ conveyed its findings to both the Federal Reserve and the Office of the Comptroller of the Currency (OCC), which are also reviewing the merger. Citing individuals familiar with the matter, the report states that the DOJ submitted a letter formally concluding its investigation and affirming that the merger does not pose competitive threats under federal antitrust laws.
A spokesperson for Capital One commented to Reuters, stating, “Our deal with Discover Financial complies with the Bank Merger Act’s legal requirements and we remain well-positioned to gain approval,” though the company declined to elaborate on the DOJ’s decision.
Announced in February 2024, the merger would position Capital One as the largest U.S. credit card issuer by outstanding balances and the sixth-largest bank by assets. It would also give the company control of Discover’s proprietary payment network, elevating Capital One’s position within the highly competitive payment services sector. Discover operates one of the four major U.S. card payment networks, alongside Visa, Mastercard, and American Express.
While the DOJ’s clearance marks a critical milestone, the deal remains under further scrutiny. Both the Federal Reserve and the OCC will continue their evaluations, incorporating input from the DOJ. Additionally, state-level antitrust reviews are ongoing, particularly in New York and California.
A spokesperson for California Attorney General Rob Bonta expressed concern about the merger’s potential effects on financially vulnerable consumers. “We are concerned that the Capital One/Discover merger could most affect those consumers who can afford it the least. No one is above the law and we’re taking a close look at this proposed merger,” the spokesperson said.
A recent letter, written by Elizabeth Warren (United States Senator), addressed to Fed Chair Jerome Powell, Vice Chair Michael Barr, and Acting Comptroller Michael Hsu accuses the agencies of failing to fulfill the directives of President Biden’s 2021 Executive Order on Promoting Competition. That order called for a strengthened framework for evaluating bank mergers, urging agencies to modernize outdated policies.
The letter highlights that the DOJ has already acted on its own by withdrawing from the 1995 Bank Merger Guidelines and adopting the more robust 2023 Merger Guidelines, supplemented by a 2024 Banking Addendum. The FDIC followed suit, finalizing an updated policy in September 2024 that prioritizes competitive effects, financial stability, and community impact. However, the Fed and OCC have yet to adopt similarly rigorous standards, prompting criticism from lawmakers and advocacy groups.
“Using a set of weak, decades-old rules to evaluate the massive Capital One–Discover deal… would amount to regulatory malfeasance,” the letter states, urging the Fed and OCC to adopt the DOJ and FDIC’s modern frameworks in reviewing the deal.
Critics argue that failure to modernize merger review procedures risks accelerating consolidation in the banking sector, potentially harming low-income consumers and diminishing competition. As federal and state reviews continue, the outcome of the Capital One–Discover merger may hinge not only on the specifics of the transaction but also on broader questions about the future of antitrust enforcement in the financial sector.
The Department of Justice declined to comment publicly on the matter, and Discover Financial did not respond to a request for comment.
