United States securities and exchange commission logo
December 28, 2023
John T. Greene
Chief Financial Officer
Discover Financial Services
2500 Lake Cook Road
Riverwoods, IL 60015
Re: Discover Financial
Services
Form 10-K for
Fiscal Year Ended December 31, 2022
File No. 001-33378
Dear John T. Greene:
We have reviewed your
filing and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2022
Risk Management, page 11
1. For each material
provision under the terms of the consent order with the FDIC, please
revise future filings
to discuss the actions you have taken or plan to take to comply with
the provisions of the
consent order and the current status of your compliance for each of
the action items. In
this regard we note that some dates listed in the consent order, such as
30 days and 75 days
after the effective date of the order, appear to have already passed.
Please ensure you
address each of the following:
the list of the
requirements imposed by the consent order on the board of directors;
corporate
governance review mandated by the consent order;
board's oversight
as to the consumer compliance program review and assessment,
consumer
compliance program report, and consumer compliance revision plan; and
board s oversight
as to the compliance vendor management review program.
Please provide us with
your proposed disclosure addressing the described implications of
the consent order.
2. In future filings,
please address the extent to which you have modified or adapted your
risk management
policies and procedures due to material changes in the size, complexity,
John T. Greene
Discover Financial Services
December 28, 2023
Page 2
or regulatory or supervisory treatment of your organization. We note
your disclosure on
page 13 that your risk committee has formed and designated a number of
sub-committees
to assist it in carrying out its responsibilities. Revise future
filings to describe the roles and
makeup of these sub-committees in more detail. In particular, discuss
the board and
management's responsibilities in managing each key risk identified.
For example, address
any modifications to risk management policies implemented as the
result of the FDIC
consent order.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk, page 75
3. We note your disclosure here that net interest income sensitivity
simulations require
various assumptions regarding market conditions, consumer behavior and
the growth and
composition of your balance sheet. Please tell us and revise future
filings to disclose the
key assumptions and parameters that are necessary to understand the
disclosure made for
purpose of your interest rate sensitivity analysis. Also, please tell
us how you determined
that presenting a sentitivity analysis covering a 100 basis point
increase or decrease in
rates was appropriate, given the overall movement of interest rates
since the Federal
Reserve began increasing its target rates.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Please contact Jee Yeon Ahn at 202-551-3673 or Marc Thomas at
202-551-3452 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Tonya Aldave at 202-551-3601 or Christian Windsor at 202-551-3419 with
any other
questions.
FirstName LastNameJohn T. Greene Sincerely,
Comapany NameDiscover Financial Services
Division of
Corporation Finance
December 28, 2023 Page 2 Office of
Finance
FirstName LastName