OpEd: More Minority Credit Opportunities with Capital One – Discover Merger (Chicago, IL) — As the Chairman of the Chicago Southland Black Chamber of Commerce, I am well aware of the challenges Black and Brown communities face as they have historically been excluded from fully participating in the nation’s financial system due to systemic barriers. Many people in Black and Brown communities are “credit invisible,” meaning they don’t have long credit histories which traditional lenders use to determine whether an applicant is trustworthy enough to be given a line of credit. Moreover, Black entrepreneurs, who are creating jobs and powering economic growth in communities all over the country, often have a hard time securing business loans due to existing disparities in the financial system.

Fortunately, Capital One and Discover’s recent decision to merge presents a unique opportunity to bring those who have historically been left behind into the fold and address these longstanding disparities. The union between the two banks will expand credit access in all communities, which is a crucial step forward when it comes to rebuilding or building strong credit, qualifying for small business loans, or even financing large purchases like a car or a home.

Both Discover and Capital One have shown their commitment to ensuring all people have access to credit, regardless of income level, background or credit history. Capital One was an innovator in the credit industry when it came along, creating products and services that were tailored to people who didn’t fit the traditional mold other lenders were looking for. Capital One is also the largest credit card issuer to first-time credit card holders, giving people – many from minority communities – the chance to build or repair their credit. By pooling their resources together, a Capital One-Discover bank can continue driving innovation in the industry by creating financial products tailored to people in minority communities and the small businesses that serve them while creating competition in the banking and payment network industries.

This merger would also be a big win for small businesses by increasing competition in the payment network space. By merging with Capital One, Discover’s payment network would be better positioned as a legitimate competitor to Visa and Mastercard, who currently process 80% of all transactions. The introduction of a legitimate new competitor in this space will push all payment networks to improve their price points and service offerings to be more competitive. In addition, it would give merchants another secure payment network to use when processing transactions, which will help small minority-owned businesses especially keep more money in their coffers.

I understand that some lawmakers are concerned that this merger would harm competition in the banking industry, but those fears are not rooted in reality. Capital One-Discover would have about $625 billion in assets, putting it well behind the Big Four banks which all have over a trillion dollars in assets each. Even the Bloomberg Editorial Board agrees that “the deal will produce a bigger competitor to megabanks such as JPMorgan Chase & Co. and Bank of America Corp.”

We need to continue advocating for the inclusion of all people in the financial system.

This merger will allow Capital One and Discover to continue to bring credit invisible and marginalized people into the financial system, allowing them to build credit and reach their financial goals while helping small businesses compete and thrive. We should seize every opportunity to create more equity in the financial system, and this merger will do just that.

OpEd: More Minority Credit Opportunities with Capital One – Discover Merger

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