The Federal Reserve and the Office of the Comptroller of the Currency each approved Capital One’s acquisition of Discover, according to announcements Friday.
The Fed, for its part, fined Discover $100 million after it determined the company overcharged certain interchange fees between 2007 and 2023. The regulator also entered into a consent order with Discover on the matter, in coordination with the Federal Deposit Insurance Corp.
Capital One said it would comply with the Fed's action against Discover, including remediation requirements, as a condition of the central bank’s approval.
The nods from the OCC and Fed represent, ostensibly, the last two regulatory approvals needed to close the largest merger in the banking space in at least six years.
The $35.3 billion acquisition, announced in February 2024, would create the largest U.S. credit card issuer. Capital One is expected to count $660 billion in assets after the transaction closes, the OCC said.
The approvals also come roughly two weeks after reports surfaced that the Justice Department’s new antitrust leader, Gail Slater, determined there isn’t sufficient evidence to challenge the deal in court.
The OCC cited, as a condition of its green light, the need to approve “plans detailing effective and sustainable corrective actions and timelines to address the root causes of any outstanding enforcement actions against Discover Bank and remediation of harm.”
The OCC “conducted a fulsome review … to ensure all statutory and regulatory requirements have been met,” the agency said in a press release Friday, adding that its announcement “reflects the OCC’s careful analysis of the effect of the merger on communities, the banking industry and the U.S. financial system.”
The Fed board said Friday it “evaluated the application under the statutory factors it is required to consider, including the financial and managerial resources of the companies, the convenience and needs of the communities to be served by the combined organization, and the competitive and financial stability impacts of the proposal.”
The OCC cited, as a condition of its go-ahead, the need to approve “plans detailing effective and sustainable corrective actions and timelines to address the root causes of any outstanding enforcement actions against Discover Bank and remediation of harm.”
The OCC “conducted a fulsome review … to ensure all statutory and regulatory requirements have been met,” the agency said in a press release Friday, adding that its announcement “reflects the OCC’s careful analysis of the effect of the merger on communities, the banking industry and the U.S. financial system.”
In a statement, the OCC’s acting comptroller, Rodney Hood, said his agency “is committed to a regulatory framework that expands access to financial services for consumers, businesses and communities.”
