Earlier this week, Capital One announced it would buy financial services provider Discover for $35.3 billion. If regulators approve the deal, the merger would leave Capital One as the largest issuer of consumer credit card loans in the United States. And beyond the implications of a shrinking credit card market for Americans’ wallets, the move is essentially an audacious bet that Americans will return Trump to the White House in November.
President Joe Biden’s tenure has ushered in a new age of anti-trust actions, anti-monopoly enforcement and crackdowns on consumer abuses. Biden’s regulators have given a thumbs-down to mergers everywhere from the airline to the biotechnology sector, on the grounds that many mergers in fact hurt consumers. They’re currently mounting challenges to the power of Big Tech. They also recently announced revamped merger guidelines, ones that would make it harder for deals to get approval going forward.
It’s hardly a secret that a second Trump administration would take a more hands-off approach to financial regulatory matters.
In fact, the Biden administration has brought the largest number of challenges to proposed deals since the government acquired the power to review proposed corporate marriages. His administration’s racked up a number of recent victories in court. Just last month, a federal judge put a stop to a proposed merger between Jet Blue and Spirit Airlines.
And then there are the consumer abuses — specifically, the junk fees that cost Americans billions of dollars annually. Last week, the Consumer Financial Protection Bureau released a survey showing that the nation’s largest banks charged consumers higher interest rates on credit card debt than their smaller rivals. Capital One was on an even more, er, select, list included as part of the study: one of 15 banks flagged for hosing its customers with an annual 30% APR on balances not paid off in full by the due date. And this finding comes at a time when both…
Read the full article here
