More than a year after Capital One Financial announced its planned $35.3 billion purchase of Discover Financial Services, the companies are still awaiting federal approvals. Meanwhile, Capital One is contending with a civil lawsuit filed this month by President Donald Trump’s company.

Last month, Discover extended the date by which it may complete the transaction to May 19, from Feb. 19 this year. Initially, under the terms of the banks’ 2024 agreement, the deal was expected to close by “late 2024 or early 2025,” according to the press release announcing the deal.

Now, the agreement is still under review by the Office of the Comptroller of the Currency, part of the Treasury Department; the Federal Reserve Board of Governors; and the Department of Justice antitrust staff, which reviews competitive effects of mergers. The DOJ’s opinions shared with other regulators on a proposed deal are typically confidential unless the administration decides to sue to block a merger.

DOJ staff have expressed concerns about the deal harming competition, but the department has not made a determination on how to proceed, nor have the companies met with DOJ leaders to press their deal, Bloomberg News reported Monday, citing people familiar with the matter. The department did not respond to a message from Payments Dive seeking comment.

The Federal Reserve has requested information about the transaction multiple times, most recently on Feb. 26, according to its website. Most of the requests have related to relatively narrow matters, such as the status of Discover’s student loan portfolio, which the company sold late last year.

The regulatory reviews have also likely been slowed by the changing U.S. administrations following the election of Trump, according to legal experts.

The Justice Department’s new antitrust chief, Gail Slater, was confirmed on March 11, and the Office of the Comptroller of the Currency has a fresh acting administrator in Rodney Hood. At the Federal Reserve, Trump on Monday nominated Michelle Bowman, a member of the Fed’s Board of Governors, as the Fed’s new vice chair for supervision. 

The companies “remain well-positioned to gain approval,” a Capital One spokesman said via email. A spokesman for Discover, which is based in suburban Chicago, declined to comment.

Against the merger-review backdrop, Trump is focusing new attention on “de-banking,” a tool that conservatives argue liberals have wielded against disfavored groups, such as payday lenders, weapons dealers, fossil fuel companies and cryptocurrency firms. Some Republicans like James Comer, R-Ky., and Sen. Tim Scott, R-SC., have investigated the issue of whether banks have avoided offering their services to certain groups, a practice dubbed “de-banking.” 

As the pending merger’s timing has lagged, four corporate entities associated with Trump and his family sued McLean, Virginia-based Capital One this month over the bank’s closure of hundreds of Trump accounts in June 2021 which held millions of dollars, according to the lawsuit filed March 7 in Florida state court. Trump’s son Eric is the only individual plaintiff. 

Capital One’s “unilateral decision came about as a result of political and social motivations and Capital One’s unsubstantiated, ‘woke’ beliefs that it needed to distance itself from President Trump and his conservative political views,” the suit says. “In essence, Capital One ‘de-banked’ Plaintiffs’ Accounts because Capital One believed that the political tide at the moment favored doing so.”

Alejandro Brito, the Florida attorney representing the Trump groups, did not respond to emails seeking comment.

“Capital One has not and does not close customer accounts for political reasons,” the company said in an email.

The private suit by the entities linked to Trump has nothing to do with the legal merits of whether the government should permit Capital One to absorb Discover, said George Hay, a Cornell Law School professor and antitrust authority. 

“In a pure world, the lawsuit should have no impact on the merger review,” he wrote in an email. “The issues are entirely unrelated. But it’s not a pure world.”

While the president turned over management of the family’s extensive corporate holdings to his sons Donald Jr. and Eric in January 2017, at the start of his first presidential term, he remains closely associated as the founder of the Trump Organization. He also has retained ownership, side-stepping calls to divest assets 

Capital One and Discover don’t present a “difficult merger” from an antitrust perspective as Discover is “a weak sister” among card issuers and networks and the merged company would probably pose more robust competition for Visa and Mastercard, Hay said in a follow-up telephone interview. Antitrust reviews are usually heavily influenced by career DOJ staff, and not political appointees, said Hay. “That would leak out pretty quickly, if they’re dragging their feet,” he said of the department.

De-banking, which has become a theme among conservative politicians, is “specious” and has become “a political football,” said Todd Baker, a former merger and acquisition attorney and managing principal at Broadmoor Consulting, which counsels financial services firms. However, the Trump lawsuit highlights the topic further, he said. 

“The challenge (the lawsuit) creates for the new Trump regulators is whatever their view of the underlying issues around antitrust and industry concentration, they now have been thrown a football that they have to catch in some way, which is, ‘Geez, should we be looking into this de-banking issue at Capital One and should that have some impact on our decision to approve or not approve?’” Baker, who also lectures at Columbia Law School, said in a March 14 interview.

“In a wholly politicized administration, this is a politically meaningful intervention by the Trump people, because they’re raising an issue that the administration as a whole has decided is a priority, and that some people in Congress consider very important,” he said.

Trump has been financially successful in at least two high-profile lawsuits since his November re-election.

In January, Meta, the parent of Instagram and Facebook, agreed to pay Trump $25 million to settle his lawsuit related to Meta’s closure of his social media accounts following the 2021 insurrection. In December, Walt Disney and its ABC News network agreed to pay the president-elect $15 million to settle his defamation lawsuit, a case that legal experts said Trump would have lost.

Trump has also sued CBS and its parent Paramount, seeking $20 billion, over its editing of an interview with Vice President Kamala Harris.

“The president, through his actions, has made it clear that all things go through him, and that there is a price for everything,” Baker said, calling the timing of Trump’s suit “kind of suspicious.”

“One would expect that Capital One will look at the situation and very reluctantly decide that the better course for Capital One is to settle the lawsuit in order that the deal go forward,” he said, suggesting the regulatory reviews in the Trump administration could hinge on the civil lawsuit.

In December, the banks’ deal received approval by the Delaware State Bank Commissioner, followed two months later by shareholders of both companies. The New York state attorney general’s office has also been investigating the proposed merger.