Thirteen prominent Democrats in Congress, led by Sen. Elizabeth Warren, have called on the Biden administration to reject the proposed $35.3 billion merger between Capital One and Discover Financial Services. The lawmakers argue that the merger would limit customers' banking and credit card choices, potentially leading to higher fees. If approved, the merger would create the largest credit card lender in the United States according to Bloomberg Intelligence data.

Top executives at Capital One and Discover anticipate the deal to close in late 2024 or early 2025, pending approval from regulators such as the Treasury Department and the Federal Reserve. The lawmakers have criticized the merger as detrimental to consumers, stressing that the financial industry is already dominated by six major bank holding companies. They urge the administration to block the merger and establish stricter rules to prevent harmful consolidations in the future.

The Biden administration has emphasized cracking down on consolidation in various industries, with a particular focus on ensuring consumer choice and preventing price increases. Despite the growing concerns, Capital One and Discover have defended the merger, asserting its benefits for customers and shareholders. However, given the administration's stringent stance on mergers, the companies may face a challenging path in obtaining approval.

As the federal merger review process begins, the fate of the Capital One-Discover merger remains uncertain. President Biden's efforts to combat concentration in the banking sector and other industries highlight the importance of preventing harmful consolidations, setting the stage for a critical test of the administration's antitrust policies.