Capital One, community groups square off in public meeting on Discover deal
Recasts to reflect that meeting has begun, adds comments by Capital One CEO, head of nonprofit coalition, details, paragraphs 1, 4, 6-8 and 10-11
Deal could boost competition but may reduce services and increase costs, say opponents
Capital One commits $265 billion over five years to lending, philanthropy, and investment
Community support could positively affect regulators' views, M&A experts say
By Michelle Price, Pete Schroeder
WASHINGTON, July 19 (Reuters) -Capital One COF.N CEO Richard Fairbank and other executives went head-to-head with community groups at a public meeting on Friday convened by regulators to discuss the bank's tie-up with Discover Financial Services DFS.N.
Unveiled in February, the $35 billion deal will create the biggest U.S. credit card issuer by balances, the sixth-largest bank by assets, and will give Capital One control of Discover's card payment network, the fourth major payment network operator.
Virginia-based Capital One and other proponents say the deal could boost card payments competition but opponents fear it will reduce services, increase costs for Americans and threaten financial stability by creating another too-big-to-fail bank.
“We believe this acquisition advances financial stability and increases competition in the industry, while also providing significant new benefits in the communities in which we operate," said Fairbank in opening remarks at the all-day hearing.
The Federal Reserve and Office of the Comptroller of the Currency (OCC), which are under political pressure to be tough on mergers, are holding Friday's meeting in a rare move reserved for the most contentious merger reviews.
The meeting offers a forum for the public to weigh in on the deal, giving opponents an opportunity to ramp up pressure on regulators.
Top congressional Democrat Maxine Waters was scheduled to speak against the deal, according to the Fed's agenda, along with a slew of community and advocacy groups.
"This merger is a terrible, horrible, no good, very bad idea," said Jesse Van Tol, CEO of the National Community Reinvestment Coalition, a powerful coalition of nonprofits. He cited financial stability concerns and worries the deal would ultimately hurt consumers.
Reuters reported on Wednesday that Capital One had committed $265 billion over five years to lending, philanthropy and investment if the takeover goes through, as it tries to appease critics and win over regulators.
That community benefits plan is more than twice as big as any to date, according to data from the NCRC which negotiated all previous plans. Van Tol dismissed the plan on Friday, saying it largely comprises credit card and auto lending that the banks already provide.
Speaking to Reuters this week, Andres Navarrete, Capital One's head of external affairs, said he believed the regulators care deeply about the plan, and that credit card and auto loans are key products for consumers that meet essential needs.
The Fed and OCC assess the deal's impact on the convenience and needs of affected communities, as well as financial stability, and competition, among other issues. The Justice Department also provides its view on the antitrust implications.
That process could take several more months, said regulatory experts.
Beyond Capital One and Discover executives, several Virginia state lawmakers and advocacy groups are expected to speak in favor of the deal, according to the agenda. Vocal support from civil rights or community groups could be helpful for Capital One.
"Community support ... positively affects the regulators' views of the transaction," said Chip MacDonald, an M&A lawyer and managing director at MacDonald Partners.
"Where antitrust concerns are present, this could also be a basis for a bank regulator finding that the public benefits of the merger outweigh the competitive concerns."
Reporting by Michelle Price and Pete Schroeder in Washington; Editing by Stephen Coates and Matthew Lewis
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
