Sen. Josh Hawley (R-MO) issued a powerful statement against the proposed megamerger of two financial giants. The conservative Republican demonstrated his opposition to Capital One’s plan to acquire Discover on Wednesday.
In a letter to Jonathan Kanter, assistant attorney general for the Antitrust Division of the Justice Department, Hawley laid out why he stood against this transaction.
Hawley advocates for government to block Capital One acquisition of Discover https://t.co/ggh7oWM0KX pic.twitter.com/v9gqFzeelN
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He declared, “This is destructive corporate consolidation at its starkest. If consummated, this merger will create a new juggernaut in the credit card market with unprecedented powers to extort American consumers.”
Hawley told Kanter that he must take the lead in preventing this acquisition. The Republican predicted that “a legion of proxies and allies of the financial industry” will swarm on regulators soon claiming that the deal will be beneficial for consumers.
To this, he stated, “that is doubtful.”
The senator cited events of recent decades as proof that these monopolistic mergers are touted as a boon for the common person. That, however, has not been shown to be the case.
Hawley said, “Instead, consolidation redounds to the benefit of shareholders and a handful of top executives — not ordinary Americans.”
Proving politics indeed makes strange bedfellows, Hawley’s condemnation of the proposal is joined by Sen. Elizabeth Warren (D-MA).
The left-wing senator said Tuesday that the “Wall Street deal is dangerous and will harm working people. Regulators must block it immediately.”
The Republican is the first in his party to call for terminating the proposed merger, though it should be hardly surprising. Hawley has a strong populist tilt, and it was just last fall when he introduced legislation that would have capped credit card interest rates.
Couple that with the Biden administration’s track record on antitrust issues, and there is a strong possibility that the merger faces an uphill climb.
According to Axios, Capital One is already the ninth-largest bank in the U.S. as measured by assets. This means it should be under heavy scrutiny by regulators.
If the multi-billion dollar deal is consummated, it could make the financial institution the largest credit card issuer. This comes at a time of record profits for the industry as rates are at or near record highs.
