U.S. Sen. Elizabeth Warren (D-MA), Senate Banking, Housing, and Urban Affairs Committee ranking member, and U.S. Rep. Maxine Waters (D-CA), House Financial Service Committee ranking member, recently sent a letter to the Federal Reserve Board of Governors, asking them to reconsider the Capital One-Discover merger the reserve approved recently.
“Merchants would have no choice but to accept the terms dictated by Capital One’s network, since they need to access the customers of the largest credit card issuer in the country,” the lawmakers said. “The market power created by combining Capital One’s card base with Discover’s network explains why Capital One CEO Richard Fairbank described the acquisition of the network as a ‘holy grail.’”
The merger creates the largest credit card issuer in the United States, the letter said, at a time when the Trump administration is attempting to shut down the Consumer Financial Protection Bureau, the only agency with legal authority to regulate, supervise, and enforce federal consumer financial laws.
“The board’s failure to adhere to the legal requirements of the Bank Holding Company Act and Administrative Procedure Act, as well as these relevant facts not previously presented to the board, necessitate an immediate stay and reconsideration of the order,” the letter said.