By Gina Heeb
A marriage of two of the country's biggest credit-card issuers is moving forward.
Capital One's $35 billion acquisition of Discover got the greenlight from the Federal Reserve and the Office of the Comptroller of the Currency on Friday. The OCC noted its approval was conditional on the resolution of pending enforcement actions against Discover.
The deal greatly expands Capital One's credit-card business and gives the bank a card network. Discover's card network is one of few that compete with Visa and Mastercard. After the merger, Capital One would have more than $650 billion in assets.
The OCC said in a statement its approval depends on "effective and sustainable" actions by Capital One to address any open enforcement actions against Discover.
The deal is expected to close in May, subject to closing conditions, Capital One said.
The greenlight could help encourage deals in the financial-services industry, which was expected to see an uptick in consolidation under the Trump administration. Some have noted that regulators may view typical bank-to-bank mergers differently, though.
Discover had struggled in recent years after increased regulatory scrutiny and shake-ups in its leadership.
In 2023, Discover disclosed that an internal review found the company had misclassified certain credit-card accounts beginning in 2007, incorrectly placing them into the highest merchant and acquirer pricing tier. It established a liability of $365 million to accrue for estimated compensation owed to merchants and acquirers.
The company said it had also received a proposed consent order from the Federal Deposit Insurance Corp. related to consumer-compliance issues.
Write to Gina Heeb at gina.heeb@wsj.com
(END) Dow Jones Newswires
April 18, 2025 11:58 ET (15:58 GMT)
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