Capital One will invest $265 billion if Discover merger goes through

Capital One has pledged to give $265 billion in lending, investment, and philanthropy over the next five years, if its acquisition of Discover Financial Services goes through.

The two financial services giants announced their $35.3 billion merger agreement in February, which, if approved, would create the largest credit card company in the U.S. by loan volume and the sixth-largest bank by assets. The deal also gives Capital One control of and access to revenue generated by Discover’s payment network of 70 million merchant acceptance points worldwide.

An acquisition of that scale will no doubt face intense regulatory scrutiny in the U.S., with fears about the merger’s impact on competition in the banking, credit card, and payments sectors. But the bank is hoping that the sizable community-oriented financial commitment announced Wednesday will help regulators see the Discover deal in a more favorable light.

“We have a long history of developing innovative ways to serve these core constituencies, and we are committed to ensuring, through this community benefits plan, that our acquisition of Discover builds on our history of positive impact,” Capital One chief Richard Fairbank said in a statement.

The Federal Reserve and Office of the Comptroller of the Currency, two agencies tasked with scrutinizing the deal, will hold a public meeting to discuss the proposed acquisition on Friday.

The $265 billion pledge will be more than twice as large as any community commitment previously developed in connection with a bank acquisition, Capital One said. That figure includes $200 billion in consumer lending to low- and moderate-income consumers and communities, $44 billion in community development financing, $15 billion in lending to small businesses, $5 billion in anticipated spending with diverse suppliers, $600 million in support for community development financial institutions, and $575 million in philanthropy.

But some community groups have sounded alarm bells on the plan. National Community Reinvestment Coalition CEO Jesse Van Tol slammed the plan as having been formed through a “deeply flawed process.”

“The large numbers in Capital One’s press release appear designed to dazzle, but these things rise and fall based on the details of implementation and accountability,” Van Tol said, calling the bank “cynical, manipulative and dishonest.”