New York probing whether Capital One-Discover merger is legal

NEW YORK (Reuters) -New York Attorney General Letitia James is investigating whether Capital One's proposed $35.3 billion takeover of Discover Financial Services violates the state's antitrust law.

In court filings on Wednesday, James asked a state judge to issue a subpoena to Capital One in connection with her probe.

She said a merger could have a significant impact in New York because Capital One and Discover have more than $9.5 billion and $6.5 billion of credit card loans in the state, respectively.

James also said the effects of a merger would be "particularly felt by the often vulnerable New Yorkers with subprime credit scores."

Capital One and Discover did not immediately respond to requests for comment.

The companies announced the all-stock merger in February. Some customers sued Capital One and Discover in July, saying the merger would reduce competition and increase consumer costs.

(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)