(Reuters) -Democrat Congresswoman Maxine Waters (NYSE:WAT) said on Wednesday she was "deeply opposed" to Capital One Financial (NYSE:COF)'s $35.3 billion planned acquisition of Discover Financial and called on banking regulators to block the deal.
"This merger represents yet another struggle to rein in the economic power of the megabanks, and ensure that our financial system is designed to serve consumers, small businesses and communities across America, not Wall Street," Waters said.
Capital One's chances of getting the deal past regulators hinge on the bank showing it can disrupt the close-knit U.S. credit card industry, five experts in corporate law interviewed by Reuters said.
Combining Capital One and Discover, the top four and five players in the U.S. credit card market by loans, would create the biggest issuer with around $250 billion in card balances and a market share of 22%, according to TD Cowen analysts.
"A merger of Capital One and Discover would result in a $625 billion bank, which is larger than the combined size of the three banks that failed last year, Silicon Valley Bank, Signature Bank (OTC:SBNY), and First Republic," Waters said.
"The failure of those so-called mid-sized banks required our government to use its emergency tools to stabilize the banking system to prevent contagion."
Separately on Wednesday, Axios reported that Senator Josh Hawley was also calling for the deal to be blocked.