Tear Sheet: Capital One Financial Corp.

Meanwhile, the Consumer Financial Protection Bureau's (CFPB) lower late fee cap of $8, which was scheduled to take effect on May 14, has been delayed. Lastly, Capital One continues to work toward receiving regulatory approval for its proposed acquisition of Discover Financial Services. Capital One will be the largest credit card lender in the U.S. if it successfully acquires Discover. The acquisition would increase Capital One's asset size by about 30% and increase its concentration to card lending, but we believe the bank's balance sheet, including capital and liquidity, would remain resilient (see Recent Research). CFPB's Final Rule On Credit Card Late Fees Could Hurt Card Issuer Earnings But Will Be Manageable For Most, March 8, 2024 Capital One Financial

...What's new: As of May 24, 2024, Capital One Financial Corp. ceased to be the exclusive issuer of Walmart Inc. private label and co-branded credit cards in the U.S. It will own and service the approximately $8.5 billion of outstanding loans from that partnership, which comprised about 5.6% of the Capital One's credit card loans or 2.8% of the total loans as of March 31, 2024. Meanwhile, the Consumer Financial Protection Bureau's (CFPB) lower late fee cap of $8, which was scheduled to take effect on May 14, has been delayed. Lastly, Capital One continues to work toward receiving regulatory approval for its proposed acquisition of Discover Financial Services. Why it matters: The dissolved partnership with Walmart will generate some meaningful financial impacts in the second quarter of 2024, but we believe these will be manageable. In addition, the delay in implementing the CFPB's late fee cap provides Capital One with more time to prepare and implement mitigation strategies (see Recent Research)....

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