The pending merger between Capital One and Discover Financial Services, valued at $35 billion, has recently received approval from key regulators, including the Federal Reserve and the Office of the Comptroller of the Currency (OCC). This significant development, initially announced in February 2024, brings the consolidation one step closer to finalization.

The Federal Reserve Board’s approval included a consent order with Discover, imposing a $100 million fine for overcharging certain interchange fees from 2007 to 2023. Discover has ceased these practices and is reimbursing affected customers for the fees. Capital One has committed to complying with the board’s actions against Discover as a stipulation for approval.

The OCC emphasized that its approval followed a thorough assessment of the merger’s impact on communities, the banking sector, and the overall US financial system. Capital One, headquartered in McLean, Virginia, anticipates completing the acquisition by May 18, having now secured all necessary regulatory clearances. Shareholders from both companies had previously endorsed the deal in February.

This merger brings together two major non-bank credit card companies, positioning them as significant players in the industry alongside established entities like JPMorgan Chase, Citigroup, and American Express. By uniting their customer bases and services, Capital One and Discover aim to compete more effectively in the credit card market, challenging the dominance of Visa, Mastercard, and other major players.