Exclusive-Capital One pledges $265 billion in lending, philanthropy as it tries to clinch Discover deal.

By Michelle Price

WASHINGTON (Reuters) -Capital One will commit $265 billion over five years to lending, philanthropy and investment if its takeover of Discover Financial Services (NYSE: DFS) goes through, the bank said on Wednesday, as it aims to appease critics and win over regulators.

Under a plan agreed upon with four community groups, Capital One has promised to maintain the combined entity’s lending to low-and-moderate income (LMI) consumers and communities at $200 billion over five years. It will retain Discover’s sole branch in Delaware and will not close any branches because of the deal. Capital One will also maintain 30% of branches and cafes in LMI neighborhoods and has promised no front-line staff cuts.

The McLean, Virginia-based Capital One has also committed over $35 billion to support affordable housing for LMI communities and individuals, a 30% increase over what the banks had previously planned, among other small business lending, product, and education pledges.

Unveiled in February, Capital One’s $35 billion Discover deal will create the biggest U.S. credit card issuer by balances and the sixth-largest bank by assets. It will also give Capital One control of Discover’s card payment network, the fourth major payment network operator after Visa (NYSE: V), Mastercard (NYSE:MA) and American Express (NYSE: AXP).

Some influential community groups oppose the tie-up between the two major U.S. consumer credit card lenders, fearing it will reduce services and increase costs for Americans. Proponents argue it could boost payments competition.

Capital One’s community benefits plan, which has not previously been reported, is more than twice as big as any such plan to date, according to data from the National Community Reinvestment Coalition (NCRC), a network of nonprofits.