WASHINGTON–Although it’s already been given the OK, Sen. Elizabeth Warren (D-MA) and Rep. Maxine Waters (D-CA) have asked the Federal Reserve to reconsider its approval of Capital One’s proposed $35.3 billion acquisition of Discover.

In a letter to the Fed the Warren and Waters said the regulator’s assessment did not sufficiently cover the transaction’s effects on low-income consumers, competition and financial stability in the U.S., and failed to include relevant information from the Justice Department, Federal Deposit Insurance Corp. and Consumer Financial Protection Bureau.

Rule is Cited

Warren and Waters pointed to a Fed board rule under which the seven-governor panel may reconsider an application if it receives a written request to do so from “any party to such application” within 15 days of a deal’s approval. Warren and Waters – who are the ranking members of Senate Banking Committee and House Financial Services Committee, respectively – stated in the letter that because they submitted comments on the application, they qualify as parties.

The Fed board now has four Democrats and three Republicans, which could give Warren’s and Waters’ effort some extra legs.

In their letter Warren and Waters were critical of the Fed’s “analysis, or lack thereof,” saying the approval “displayed a troubling lack of rigor with unsupported conclusions that ran counter to the factual record.”

The letter further pointed out that the vast majority (91%) of the more than 6,100 public comments on the application opposed the deal. 

‘No Attempt’

“Nowhere in any of the competitive effects analyses did the Board even attempt to evaluate whether fees, credit availability, interest rates, or non-price harms like customer service would be impacted by the deal,” the letter states. “The Order reads like the Board had predetermined it was going to approve the transaction and either ignored relevant facts or explained them away with baseless assertions copied and pasted from Capital One’s application.”