Capital One should not be allowed to buy Discover, 22 advocacy groups said Tuesday in a letter to banking regulators and antitrust officials.
“The scale and scope of harms represented by this transaction are enormous,” the National Community Reinvestment Coalition (NCRC), the American Economic Liberties Project (AELP), Public Citizen, Americans for Financial Reform and 18 other signers wrote in the letter. “The threat is grave, not just to the dynamism of the economy and the stability and competitiveness of the financial services sector, but to American businesses and the health of consumers across the country. Bank regulators, and, if necessary, the Justice Department, must deny it.”
The letter spells out the proposed merger’s harmful impacts on working Americans, businesses, and the economy, as well as the many ways in which the deal violates antitrust law, the Bank Merger Act, and the Community Reinvestment Act (CRA). It also recounts Capital One’s serious breaches of law and exploitations of lower-income customers in recent years. 22 advocacy organizations co-signed the letter.
“Capital One is a notorious bad actor even at its current size and should not be allowed to further concentrate market power,” said Jesse Van Tol, President and CEO of NCRC. “This deal would be bad for marginalized communities, bad for credit card holders and bad for financial markets. Far from clearing the legal requirement that bank mergers must benefit the public, this proposed acquisition would only be good for Capital One insiders. Regulators should therefore reject the deal.”
“Capital One’s acquisition of Discover is dangerous, illegal, and must be stopped,” said Shahid Naeem, Senior Policy Analyst at the American Economic Liberties Project. “Vague claims that the merger will benefit competition in payment networks are a Trojan Horse concealing the merger’s real goals: higher interchange fees, more costly credit cards, and a surge in size connoting an implicit too-big-to-fail government backstop. It might be lucrative for Capital One, but everyone else will pay.”
“This merger would create the sixth largest bank in the United States,” said Bartlett Naylor, financial policy advocate for Public Citizen. “We learned from the 2008 financial crash that when such behemoths falter, the government uses taxpayer dollars to bail them out. Just last year, the government rescued far smaller regional banks, such as Silicon Valley Bank. Capital One focuses on subprime lending, dry kindling for another financial fire.”
“This takeover would turn Capital One into a behemoth of a credit card issuer that would be highly susceptible to a financial shock,” said Alexa Philo, senior policy analyst at Americans for Financial Reform. “There are lots of reasons not to approve this merger. The threat to financial stability is one of them.”
The full text of the letter can be found here.
The following organizations signed the letter:
Accountable.US
AKPIRG
American Economic Liberties Project
American Family Voices
Americans for Financial Reform Education Fund
Center for Digital Democracy
Demand Progress Education Fund
Freedom BLOC
Institute for Local Self-Reliance
Main Street Alliance
National Community Reinvestment Coalition
New Economy Project
Open Markets Institute
Presente.org
P Street
Public Citizen
Revolving Door Project
Rise Economy (formerly California Reinvestment Coalition)
RootsAction.org
U.S. PIRG
The Value Alliance
20/20 Vision
