Capital One has been given conditional approval to merge with Discover Financial Services, federal officials announced on Friday.
The approval was granted by the Office of the Comptroller of the Currency, according to CNN.
It was one of the final hurdles that had to be overcome to complete the deal.
The Federal Reserve still has to give its approval. The Justice Department’s antitrust division already gave the OK while shareholders approved the deal in February.
Capital One’s purchase of Discover has a price tag of $35 billion and is expected to be completed by May 18, The Associated Press reported.
The comptroller’s office said that the approval came after "careful analysis of the effect of the merger on communities, the banking industry, and the U.S. financial system.”
Not only will the deal expand Capital One‘s network of merchant fees, but it will also allow Discover to expand the number of businesses that accept the credit card.
Capital One will keep Discover as its own brand, The Wall Street Journal said.
The most popular credit cards are Visa and Mastercard, with American Express coming in third. Discover is in fourth place when it comes to how many locations it is accepted at, the AP reported.
In addition to not being accepted as much as its competitors, Discover also faced other challenges.
The company was fined by the Federal Reserve Board $100 million for overcharging some interchange fees from 2007 to 2023, a practice that has since ended. Discover is repaying its customers those fees, the Federal Reserve Board said. Capital One said it will continue to comply with the rules on Discover set by the board once the deal goes through.