Capital One

Ally Financial ended a six-month search for its next chief executive by hiring Discover CEO Michael Rhodes. The move adds a new wrinkle to Discover's pending sale, though Discover said that Rhodes hadn't been expected to have a long-term role at Capital One following the merger's completion.

The credit card giant says that it is "proactively meeting" with advocacy organizations to gather feedback that would help with the creation of a community benefits plan. The National Community Reinvestment Coalition, which has negotiated 21 such deals since 2016, opposes Capital One's proposed acquisition of Discover.

The blockbuster merger is now in the hands of banking agencies and the Department of Justice, which will have to evaluate its impact on competition.

The lawmakers, led by Sen. Elizabeth Warren, D-Mass., said the deal would further anti-consumer bank consolidation, but also criticized the OCC's proposed changes to the merger process, asking that they be strengthened.

The two companies in the largest bank merger since the 2008 financial crisis released details of their agreement. It leaves the door open for Discover to field better offers, though the payments company would pay a break-up fee of 4% if it accepts one.

In the wake of the largest U.S. bank deal in more than 15 years, industry executives offered mixed views about the prospects for more big acquisitions. They also spoke about the deal's impact on competition in the credit card business.

The credit card lender's blockbuster acquisition of Discover is not guaranteed to get across the finish line. But co-founder and CEO Richard Fairbank appears to see the rewards that would come from controlling a payments network as outweighing the potential downside.

The combined company could streamline card payments in a manner similar to American Express' "three party network" — while also doing more with artificial intelligence and other technologies.

The blockbuster merger proposal will be reviewed at a time when the Biden administration is expressing skepticism about consolidation. Its analysis will have to account for markets dominated by both big banks and the likes of Visa and Mastercard.

Capital One Financial's proposed acquisition of Discover Financial Services would create a credit card behemoth with its own payments network. The deal is likely to draw tough regulatory scrutiny, though analysts say there are many compelling strategic reasons for the combination.