Discover, Capital One loans ravaged by Fed stress test

Discover Financial Services’ loan book took the biggest beating under the Federal Reserve’s latest Dodd-Frank Act stress test (DFAST), with a projected loss rate of 17%, equal to $16.3 billion, when subjected to the regulator’s severely adverse scenario.

The aggregate loan-loss rate across the 33 participating banks was 6.3% over the nine quarter horizon of the simulation. Among top US lenders – those designated as category one, two or three – Capital One was the worst affected by the Fed