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Jamie Dimon on Capital One’s $35.3 billion Uncover acquisition: ‘Allow them to compete’

Jamie Dimon on Capital One’s $35.3 billion Discover acquisition: ‘Let them compete’

JPMorgan Chase CEO Jamie Dimon is not fearful concerning the added competitors from a bulked-up Capital One if its $35.3 billion takeover of Discover Financial will get accepted.

“My view is, allow them to compete,” Dimon mentioned. “Allow them to strive, and if we expect it is unfair, we’ll complain about that.”

Dimon, chatting with CNBC’s Leslie Picker at a Miami convention, acknowledged that if regulators approve the Capital One-Uncover deal, his financial institution will probably be eclipsed because the nation’s greatest bank card lender.

However that did not cease him from praising Capital One CEO Richard Fairbank, who he credited with shaking up the cardboard business in a manner that finally led Dimon to turning into CEO of a predecessor agency to JPMorgan greater than 20 years in the past.

“Richard is why I am right here,” Dimon mentioned.

In regards to the transaction, he added, “I am not fearful about it actually, however we do monitor all the things he does.”

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Final week, Capital One introduced the largest proposed merger of the yr, one that might rework the trillion-dollar bank card business. By buying Uncover, Fairbank is each bulking up as a lender and boosting the smallest of the funds networks after Visa, Mastercard and American Express.

“The bank card enterprise … they will be larger and [have] extra scale,” Dimon mentioned. “They’re superb at it. I’ve monumental respect for Richard Fairbank and Capital One.”

It is unclear if Capital One can create a real various to the dominant card networks with this deal, Dimon mentioned.

He added that Capital One can have an “unfair benefit versus us” in debit funds, owing to the truth that laws often known as the Durbin Modification caps debit charges for giant banks, however not Uncover or American Specific.

“In fact, I’ve an issue with that,” Dimon mentioned. “You realize, like why ought to they be allowed to cost debit completely different than we value debit simply due to a regulation that was handed?”

Extra broadly, Dimon mentioned he additionally favored permitting small banks to merge. A wave of business consolidation has been anticipated after the tumult of final yr’s regional banking disaster, however solely a trickle of smaller offers have occurred as far as executives are uncertain if they will go regulatory muster.  

The most important query remaining concerning the Capital One deal is whether or not regulators will approve it. Greater than a dozen Democrat lawmakers together with Sen. Elizabeth Warren, D-Mass., signed a letter to the Federal Reserve and the Workplace of the Comptroller of the Forex on Sunday urging them to dam the settlement.

“To guard customers and monetary stability, we urge you to dam this merger and strengthen your proposed coverage assertion to forestall dangerous offers sooner or later,” they wrote.

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