Letter to the AG: Urging Action to Block the Harmful Capital One-Discover Merger

Dear Office of Illinois Attorney General Kwame Raoul,

We write to ask that you consider action to block the proposed Capital One-Discover merger to protect Illinois consumers. This merger threatens to create a monopolistic environment in the credit card market, drastically reducing competition and leaving consumers, particularly those with non-prime credit scores, vulnerable to higher prices and limited choices. By preventing this merger, federal regulators can ensure a fairer, more competitive market that better serves the needs of consumers and small businesses alike. 

The merger fails to meet Bank Merger Act public interest requirements: The proposed acquisition of Discover by Capital One would create the sixth-largest bank in the United States, with $624 billion in domestic assets. This transaction fails to meet the public interest conditions under the Bank Merger Act that directs banking regulators to reject mergers, like the Capital One-Discover transaction, that fail to further the convenience and needs of communities, have regulatory or consumer compliance problems, or pose risks to the stability of the banking or financial system. Capital One has a demonstrated record of failing to fulfill the commitments it made to secure previous merger approvals, which alone warrants the rejection of this merger.

The merger would have serious antitrust implications: The proposed Capital One takeover of Discover would create a mammoth bank that would undermine competition, raise prices, and harm consumers. The merger would create the biggest credit card lender — holding nearly one-third of credit card loans to consumers with non-prime credit scores — and put Capital One in a position to use its market power to raise prices on virtually captive consumers. The unique vertical elements of the merger — combining a bank with a credit and debit card network — would entrench Capital One as a dominant high-cost credit card issuer and raise costs for merchants and consumers. Far from injecting competition into credit card markets, it would merely re-arrange the oligopoly and worsen competition as Capital One’s higher prices displaced Discover’s more affordable cards. Antitrust and banking regulators should make every effort to block the transaction.

Currently, federal banking and antitrust regulators are considering whether to approve or reject this bank merger application. States Attorneys General have a role to play in enforcing antitrust laws to protect residents from anti-competitive and anti-consumer mergers. Citizen Action/Illinois, Illinois PIRG, Americans for Financial Reform Education Fund, and our allies request a meeting to discuss these vital issues with your office.

Thank you,

Citizen Action/Illinois

Illinois PIRG

Americans for Financial Reform Education Fund

For more information see AFREF’s Top 10 Reasons to Block the Capital One-Discover Merger, Fact Sheet: Antitrust Implications of the Proposed Capital One-Discover Merger, Fact Sheet: Proposed Capital One-Discover Merger Fails to Meet Bank Merger Act Requirements, IL Financial Jobs Seen at Risk With Financial Merger