A new probe by New York Attorney General Letitia James, revealed in a court filing Wednesday, marks an important step in pushing back against the proposed merger of Capital One and Discover, one that should prompt other state antitrust officials to join efforts to block this harmful transaction.
Today, the Justice Department released a new approach to bank merger enforcement that brings the woefully outdated bank merger guidelines into the 21st century. The Justice Department announced that it would apply the greatly improved overall merger guidelines, which were released in 2023, to bank mergers as well. The bank merger rules that are currently in place date from the era of dial-up modems and are totally insufficient to address the complex market power issues posed by many proposed bank mergers — including the pending Capital One-Discover merger.
Today, Americans for Financial Reform and many allies will take our case directly to federal banking regulators and demand that they block the proposed Capital One-Discover merger. Federal regulators have rubber stamped thousands of bank mergers over the past few decades, consolidating the industry to create risky megabanks, reducing choices and raising prices for depositors and small businesses. The wave of mergers beginning in the mid-1990s contributed to the contagious fragility of the banking system during the 2008 financial crisis. Here are the top 10 reasons to block this merger:
Today, 29 groups called on federal bank regulators to finally draft a plan to strengthen the merger guidelines to mitigate the adverse effects of bank consolidation, which include increased evictions, higher rates of debt collection, and decreased access to credit for consumers and businesses.
Americans for Financial Reform Education Fund submitted a comment letter asking the Department of Justice to protect the public interest from ever larger banks exercising market power to impose higher costs on consumers, reduce the volume or quality of banking services, and from becoming so large that they pose a risk to the entire financial system and real economy.