Capital One Discover Merger

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Cesar Chavez

During my time in the Arizona House of Representatives, I was committed to making sure minority-owned businesses and underserved communities had access to credit. I see the merger between Capital One and Discover as an extension of that work– an opportunity to greatly uplift often forgotten communities and to stimulate local economies in Arizona and nationwide.

The proposed merger between Capital One and Discover, which needs to be approved by regulators, will allow Discover and Capital One to come together and build on their work of ensuring every American has access to credit. This will be an undeniable victory for underserved and underbanked communities who have historically been left behind by other banks and credit unions.  

Unlike many other financial institutions that have historically excluded Black, Brown, and immigrant communities from fully participating in the American financial system, Discover and Capital One have been pioneers in this space.  For one, Capital One has demonstrated a strong commitment to the Community Reinvestment Act, a critical piece of legislation aimed at ending the destructive practice of redlining which decimated opportunities for black and brown families. CRA works by encouraging banks to provide services in low- and middle-income (LMI) neighborhoods. Capital One ranks first among larger banks when it comes to serving LMI communities, with one-third of their branches being located in these neighborhoods, and is the largest issuer of credit cards to first-time cardholders. 

Discover for their part, is known as many people’s first credit card, which gives people who lack an established credit history the chance to start building credit. Similarly, Capital One is the largest issuer of credit cards to first-time card holders, empowering countless Americans to start building credit. Capital One also offers a myriad of innovative financial products to help people repair their credit without falling into debt traps and Capital One was the first of the top ten banks to eliminate overdraft and insufficient funds fees from all their products while still providing free overdraft protection. 

The newly formed bank can build on this mission by offering more innovative services to help people build or repair credit. Capital One will be able to add 305 million cardholders to its existing customer base of more than 105 million customers, which will help more Americans take advantage of the services both banks can offer and work toward reaching their financial goals like home ownership or taking out loans to go to college or start a business. 

I understand that some lawmakers are concerned that this merger will create a more concentrated card issuer market. But the facts say otherwise. A recent study from the Bank Policy Institute found that “the credit card market isn’t even close to being over-concentrated.” In addition, there are over four thousand issuers from top banks to smaller regional and community banks, and many offer similar products that are easy for consumers to switch between. As a result, this merger will only strengthen competition in the card issuer market.  

I want to live in an America where Americans from all walks of life can access the financial resources needed to chase the American dream. Capital One has demonstrated a strong commitment to serving communities that other banks have historically left behind. By merging with Discover, a Capital-One Discover bank can use its resources to bring credit access to every community in the country, empowering people to build credit and ultimately build wealth. 

I urge President Joe Biden and this administration to see the promise this merger holds. It will give more Americans the chance to fully join America’s financial fabric by expanding much-needed access to credit. Allowing this merger to go through will be a big victory for Arizona’s immigrant, Black, and Brown communities. 

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