Schumer presses Capital One, Uncover on merger deal

Senate Majority Chief Charles Schumer, D-N.Y., despatched a letter to the CEOs of Capital One and Uncover asking for extra data concerning the businesses’ proposed $35 billion merger.

Bloomberg Information

WASHINGTON — Senate Majority Chief Chuck Schumer, D-N.Y., wrote to Capital One Monetary Corp. and Uncover Monetary Companies, questioning the competitiveness of the pair’s proposed deal. 

Capital One’s proposed $35 billion acquisition of Uncover would create a bank card behemoth, and is prone to set off cautious scrutiny from regulators, who might want to approve the deal. 

Schumer’s curiosity within the deal is notable: He is a strong lawmaker, and has the flexibility to place payments on the Senate ground that would, ultimately, move into legislation. Notably, he has the ability to connect the Durbin-Marshall bank card competitors invoice onto a bigger, must-pass piece of laws. 

His nationwide profile additionally makes his bully pulpit highly effective. 

Schumer stated that the aggressive evaluation that the 2 monetary firms supplied to regulators “asserts that the nationwide marketplace for credit-card issuance is fragmented with out contemplating how competitors operates in smaller markets.” 

“It is a important think about antitrust legislation as a result of sure buyer sorts could not view all competing merchandise as substitutes, and a few of your firms’ merchandise could also be designed to enchantment to or preserve particular demographics,” Schumer stated within the April 10 letter, which was despatched to Capital One CEO Richard Fairbank and former Uncover CEO Michael Rhodes. “Thus, I want to study the aggressive panorama on narrower bases.” 

Schumer requested the 2 executives whether or not both agency plans any worker layoffs, and for aggressive evaluation of assorted danger profile debtors.

Whereas the deal’s proponents argue that it could enable the mixed Capital One and Uncover to higher compete with Visa and Mastercard, Schumer stated the potential anticompetitive results may outweigh the good thing about a 3rd main bank card competitor. 

“Extra focus — past acceptable ranges — is a priority regardless of any alleged pro-competitive synergies,” he stated. 

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