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AFREF submitted a brief to the Justice Department and OCC documenting the harms of the proposed Capital One Financial Corporation acquisition of Discover Financial Services, which would substantially erode competition and disadvantage consumers and merchants. The transaction would create the nation’s biggest credit card lender, one of the biggest banks, and a powerful vertically integrated payments network combined with a branch bank and credit card issuer. The combined firm would hold over 22 percent of outstanding credit card loans including over 30 percent of loans to consumers with non-prime credit scores. The combined firm would have the scale and scope to profitably exert market power over its customers, merchants, and rivals. The antitrust and banking regulators must block the merger to protect consumers from the anticompetitive exercise of consolidated market power.

It is particularly critical to guard against consolidation in the banking sector and prevent anticompetitive bank mergers. The intent of the antitrust laws including the Clayton Act and Bank Merger Act was not solely to prevent narrow concentrations in local depository institutions, but to prevent the concentration of economic power that could undermine shared prosperity and democracy. The concentration of financial and market power in the hands of a small cadre of megabanks contributes to economic and racial inequality. Banks allocate capital and act as gatekeepers to financial success and the biggest banks can concentrate economic resources to entrench corporate titans in other economic sectors.