The Department of Justice has cleared the $35 billion merger between Capital One Finance Group and Discover Financial Services, potentially creating the nation’s largest credit card issuer and signaling a notable shift in antitrust enforcement under the Trump administration.

The decision, announced late last week, represents a reversal from concerns raised during the Biden administration. Earlier this year, the DOJ had warned in a draft memo that the merger could harm competition, particularly affecting first-time credit card holders and potentially leading to higher fees for consumers.

Gail Slater, the newly appointed antitrust chief under Trump, determined there was “insufficient evidence” to block the merger on competitive grounds, according to internal documents. This conclusion stands in stark contrast to the previous administration’s more aggressive stance on corporate consolidation.

“Our deal with Discover Financial complies with the Bank Merger Act’s legal requirements,” a Capital One spokesperson said in a statement following the announcement.

The merger still requires approval from the Federal Reserve and the Office of the Comptroller of the Currency before it can be finalized. However, analysts had considered the Justice Department the most likely obstacle to the deal.

If completed, the acquisition would dramatically reshape the credit card landscape. Capital One would gain approximately 300 million credit card holders from Discover, adding to its existing 100 million customers. This consolidation would make Capital One the largest credit card issuer in the United States by balances.

Critics, including Senator Elizabeth Warren (D-Mass.), have voiced serious concerns about the deal’s impact on consumers. “This merger will increase fees and credit costs for everyday Americans,” Warren stated in response to the DOJ’s decision.

The credit card industry has already seen significant consolidation over the past two decades. Twenty years ago, the top ten credit card issuers controlled approximately 55% of the market; today, they control more than 85%. This continued concentration raises questions about diminishing consumer choice and potential price increases.

A University of California, Berkeley analysis noted particular concerns for lower-credit consumers. The merger would give Capital One “a substantial share of the non-prime credit card market,” potentially enabling the company to increase interchange fees—transaction charges that ultimately affect both merchants and consumers.

Supporters of the merger argue it could create a stronger competitor to industry giants Visa and Mastercard. Northwestern University’s Kellogg School of Management suggested the deal “could lead to a realignment” of the credit card industry if Capital One transitions customers from Visa and Mastercard networks to Discover’s platform.

The Justice Department’s approval may indicate a broader shift in how the Trump administration will approach corporate mergers. Under Biden, the DOJ set a record for enforcement actions to block or modify mergers, including successfully challenging Visa’s attempted $5.3 billion acquisition of fintech firm Plaid.

Bloomberg reported that Justice Department staffers were divided on whether to challenge the Capital One-Discover merger, but Slater’s decision ultimately prevailed.

As financial services continue to consolidate, consumer advocates worry about the long-term consequences. With fewer players in the market, the leverage consumers have in negotiating terms, avoiding fees, and securing competitive interest rates diminishes.

For now, the merger advances to its next regulatory hurdles. Whether the Federal Reserve and OCC will share the Justice Department’s permissive view remains to be seen, but the DOJ’s decision has already set a significant precedent for how financial consolidation may be evaluated under the current administration.