NEW YORK, Oct 23 (Reuters) - New York Attorney General

Letitia James is investigating whether Capital One's

proposed $35.3 billion takeover of Discover Financial Services ( DFS )

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.