WASHINGTON, D.C. - Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released this statement following news that Capital One Financial Corporation is proposing to purchase Discover Financial Services for $35 billion.
“I am deeply opposed to Capital One’s announced acquisition of Discover. This merger, which involves two of the country’s largest banks and credit card companies, will have major implications for consumers and small businesses everywhere. Over the last few decades, we’ve seen the harm that market consolidation like this poses, and we know that consumers and entrepreneurs can be harmed when the biggest financial institutions get even bigger. Wells Fargo, for example, grew quickly through multiple mergers and eventually became too big to manage, repeatedly breaking the law by defrauding millions of consumers. We also know that the largest credit card companies charge consumers higher interest rates compared to smaller ones, resulting in many consumers paying $400 to $500 more every year in additional financing costs for effectively the same service. I am also increasingly concerned that one day our country may be left with only a handful of megabanks, and as the cost of doing business, they pay billions of dollars in penalties for preying on vulnerable communities, small businesses, and consumers, while they rake in hundreds of billions of dollars in profits. Their frontline workers are often neglected while their CEOs are paid hundreds of times more than them.
“A merger of Capital One and Discover would result in a $625 billion bank, which is larger than the combined size of the three banks that failed last year, Silicon Valley Bank, Signature Bank, and First Republic. The failure of those so-called mid-sized banks required our government to use its emergency tools to stabilize the banking system to prevent contagion. It is also important to note that these same banks are waging an all-out war on long overdue safeguards to modestly increase capital at the largest institutions. I am now more committed than ever to seeing President Biden’s regulators quickly adopt robust rules, including those implementing the Basel III endgame proposal, to safeguard against future financial crises and taxpayer bailouts of Wall Street.
“As the Department of Justice and our nation’s banking regulators review this proposed acquisition, I call on them to move quickly to block it. For far too long, regulators rubber stamped bank merger applications, despite these mergers not being in the best interest of the public. Make no mistake, while we are fighting to ensure that our nation’s biggest banks have adequate capital to prevent bank runs and financial calamities, this merger represents yet another struggle to rein in the economic power of the megabanks, and ensure that our financial system is designed to serve consumers, small businesses and communities across America, not Wall Street.”
