New York Attorney General Letitia James is currently examining the proposed $35.3 billion acquisition of Discover Financial Services by Capital One, amid concerns that the merger may breach state antitrust laws. In recent court documents, James requested a Manhattan judge to issue a subpoena for Capital One to provide necessary documents, citing the bank’s insufficient cooperation during the investigation.
James highlighted that the merger could significantly affect New York, where Capital One and Discover hold substantial credit card loan portfolios—over $9.5 billion and $6.5 billion, respectively. She expressed particular concern for vulnerable New Yorkers with subprime credit scores, noting that the merger could exacerbate their financial challenges.
Capital One, headquartered in McLean, Virginia, is among the largest banks in the U.S., boasting $480 billion in assets as of June 30. The bank is expected to release its third-quarter earnings on Thursday. In response to the investigation, Capital One stated it would address James’s inquiries through appropriate legal channels and remains confident in obtaining approval from federal regulators. The bank emphasized its belief in the merger’s potential benefits for competition and consumers.
The all-stock merger, announced in February, aims to create the largest credit card issuer in the U.S., surpassing JPMorgan Chase with over $250 billion in outstanding loans and access to more than 305 million cardholders. James noted that if completed, this deal would solidify Capital One’s position as the leading issuer of subprime credit cards, capturing more than 30% of that market segment.
For the merger to proceed, it must also receive approval from shareholders and regulatory bodies like the Department of Justice and Federal Trade Commission. Both companies hope to finalize the deal by early 2025.
In May, James’s office requested that Capital One and Discover waive confidentiality protections to facilitate a review of documents they submitted to federal authorities. While Discover agreed to this request, Capital One declined, arguing that compliance would grant New York unlawful oversight over national banks—prompting James to seek a subpoena.
Consumer advocacy groups have also raised alarms about the merger, asserting it could diminish competition and lead to higher costs for customers.
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