JPMorgan Chase CEO Jamie Dimon isn’t worried about the added competition from a crowd Capital one if it is a $35.3 billion acquisition Discover finance is approved.
“In my opinion, you should let them compete,” Dimon said. “Let them try, and if we think it’s unfair, we’ll complain about it.”
Dimon, speaking to CNBC’s Leslie Picker at a conference in Miami, acknowledged that his bank would be eclipsed as the country’s largest credit card lender if regulators approved the Capital One-Discover deal.
But that didn’t stop him from praising Capital One CEO Richard Fairbank, whom he credited with shaking up the card industry in a way that eventually led Dimon to CEO of a predecessor to JPMorgan more than 20 years ago.
“Richard is the reason I’m here,” Dimon said.
Regarding the transaction, he added: “I’m not really worried about it, but we’re following everything he does.”
Last week, Capital One announced the biggest proposed merger of the year that could transform the trillion-dollar credit card industry. By acquiring Discover, Fairbank both expands its position as a lender and further expands the smallest payments network Visas, MasterCard And American Express.
“The credit card business…they’re getting bigger and [have] more scale,” Dimon said. “They are very good at it. I have great respect for Richard Fairbank and Capital One.
It’s unclear whether Capital One can create a real alternative to the dominant card networks with this deal, Dimon said.
He added that Capital One will have an “unfair advantage over us” when it comes to debit payments because legislation known as the Durbin Amendment limits debit fees for major banks, but not for Discover or American Express.
“Of course I have a problem with that,” Dimon said. “You know, why should they be allowed to price direct debits differently than we do just because a law was passed?”
More broadly, Dimon said he also supports merging small banks. A wave of consolidation in the industry was expected after the turmoil of last year’s regional banking crisis, but so far there have been few smaller deals as executives are unsure about their ability to pass regulatory requirements.
The biggest remaining question about the Capital One deal is whether regulators will approve it. More than a dozen Democratic lawmakers, including Sen. Elizabeth Warren, D-Mass., signed a letter Sunday to the Federal Reserve and the Office of the Comptroller of the Currency urging them to block the deal.
“To protect consumers and financial stability, we urge you to block this merger and strengthen your proposed policy statement to prevent harmful deals in the future,” they wrote.
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2024-02-26 19:59:27
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