Tysons, Virginia-based Capital One Financial is now the nation’s largest issuer of credit cards, or at least technically soon will be, after receiving final regulatory approval for its acquisition of Discover Financial.
Capital One announced its intention to buy Discover in February 2024 in a deal valued at $35 billion.
On Friday, the Federal Reserve and the Office of the Comptroller of the Currency approved the deal. The Justice Department signed off on the deal in early April, with its antitrust division finding no sufficient evidence to challenge it, despite anti-competitive concerns.
The merger is expected to close May 18. Customers will see no immediate changes to their accounts, Capital One said.
“We understand the critical importance of a strong and competitive banking system to our customers and our economy, and we appreciate the thoughtful and diligent engagement of our regulators as they thoroughly reviewed this deal over the past 14 months,” said Richard Fairbank, Founder, Chairman and CEO of Capital One.
In addition to becoming the largest issuer of credit cards in the U.S., Capital One will control one-third of the credit card market for subprime borrowers.
Capital One was spun off from Signet Financial Corporation in 1994 and eventually expanded into other lending products, such as auto loans. Its banking business has grown significantly over the years. It has $363 billion in deposits and $490 billion in total assets. It is ranked as the largest bank by deposits in the D.C. metro area, and accounts for almost 20% of the region’s retail and business banking market share.
Capital One has been using the “What’s in Your Wallet” advertising slogan since 2000.
Discover dates back to the 1980s, originally part of department store chain Sears’ financial services business. Through several ownership changes, Discover Financial became a standalone financial services company in 2007.
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