Capital One Completes Game-Changing $35 Billion Acquisition of Discover: What It Means for You

Fifteen months after the announcement, Capital One has officially acquired Discover for $35 billion. This deal, finalized on May 18, creates the largest credit card issuer in the U.S. by loan volume.

Richard D. Fairbank, Capital One’s CEO, expressed excitement about the merger, stating it unites two innovative companies. He thanked Discover’s board and interim CEO, Michael Shepherd, for their support. "This merger positions us to change banking for good for millions," Fairbank said.

The agreement, made public in February 2024, gained approval from several regulatory bodies, including the Federal Reserve and the Office of the Comptroller of the Currency. However, just before the deal was finalized, some lawmakers, including Rep. Maxine Waters and Sen. Elizabeth Warren, urged the Federal Reserve to reconsider its decision. They argued that consumers and small businesses could face challenges because of the increased power Capital One would have over terms and conditions in the market.

Notably, this acquisition could benefit consumers living paycheck to paycheck. By merging with Discover, Capital One gains significant capabilities in cross-border commerce and payments. It also strengthens its competitive stance against major players like Visa and Mastercard. Fairbank previously commented that the goal is to build a payment network rivaling the largest in the industry.

In recent news, Capital One also settled a lawsuit for $455 million. Plaintiffs accused the bank of misleading depositors about interest rates on its savings accounts, favoring new customers with better rates.

As mergers like this reshape the financial landscape, it’s essential to remain informed about their impacts on consumers and businesses alike. For further insights on the implications of this acquisition in the financial industry, check out CNBC’s report on the latest developments.

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