Capital One defends $35 billion Discover deal against critics, touting benefits

From Investing.com: 2024-07-19 14:26:43

Capital One CEO Richard Fairbank defended the $35 billion Discover Financial Services deal at a public meeting, touting benefits like financial stability and increased competition. Critics fear reduced services and financial instability. Regulators, including the Federal Reserve and OCC, are under pressure but analysts see no statutory reason to block the deal.

Opponents like top Democrat Maxine Waters argue the deal would limit consumer options and have a negative impact, echoing concerns from the National Community Reinvestment Coalition (NCRC) that the merger is a bad idea. However, regulatory experts believe criticism may not sway officials, who review the deal based on specific criteria.

Capital One has committed $265 billion to lending and investment over five years to address critics and regulators, promising community benefits in excess of previous plans. However, NCRC analysis suggests the promised investments may not significantly exceed historical spending levels by the banks. Capital One disputes this analysis, citing market conditions influenced by the pandemic.

Advocates including Virginia state lawmakers and financial literacy groups spoke in favor of the deal, praising Capital One’s commitment to underserved communities. However, University of Michigan professor Jeremy Kress believes arguments at the hearing will have minimal influence on regulatory decisions, viewing the meeting as mostly for show.



Read more at Investing.com: Capital One, community groups square off in public meeting on Discover deal By Reuters