HousingWireHousingWire
Capital One Financial Corp. has decided to shut down the home equity and refinance operations it inherited through its acquisition of Discover Financial Services, the company confirmed this week.
The decision comes roughly two months after Capital One finalized its all-stock, $35.3 billion acquisition of Discover, originally announced in February 2024. Home Equity Lending News first reported on the topic.
Under the terms of the deal, Capital One shareholders now own 60% of the combined company, with the remaining 40% held by Discover shareholders. The transaction also included the indirect acquisition of Discover Bank.
A Capital One spokesperson said the company “conducted an extensive strategic business review of Discover’s home equity and refinance loan business to better understand its position and potential as part of Capital One’s business portfolio.”
“In late June, we announced the difficult decision to exit this business. We are focused on supporting our customers and associates through this transition,” the spokesperson added.
As part of the acquisition, Capital One committed to investing $265 billion over five years through a community benefits plan, which includes expanding access to safe and affordable housing.
In clearing regulatory hurdles tied to the deal, Capital One agreed to pay a $100 million penalty to settle charges that Discover had overcharged certain interchange fees between 2007 and 2023, reimbursing affected customers.
Separately, in February, the Consumer Financial Protection Bureau (CFPB) dropped a legal action against Capital One. The agency had previously accused the bank of depriving consumers of more than $2 billion in interest on their savings accounts.