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Code of Ethics and Business Conduct

DISCOVER FINANCIAL SERVICES
CODE OF ETHICS AND BUSINESS CONDUCT

This Code of Ethics and Business Conduct (the "Code of Ethics") sets forth principles that you must follow in your activities as a director, officer, or employee of Discover Financial Services (the "Company"). It also covers your obligations to Discover Financial Services should you leave the Company. It should be read together with other applicable Company policies and procedures, including the officer and employee Code of Conduct (the "Code of Conduct").

The Code of Ethics does not cover every legal or ethical issue that you may face at the Company. Indeed, no code can attempt to anticipate the myriad issues that arise in any business. However, by following the Code of Ethics and other Company policies and procedures, by adhering to the letter and the spirit of all applicable laws and regulations, and above all by applying sound judgment to your activities, you can demonstrate your commitment to the Company's values.

PRINCIPLES OF THE CODE OF ETHICS

FOLLOW BOTH THE LETTER AND THE SPIRIT OF THE LAW AND DISCOVER FINANCIAL SERVICES POLICIES

Discover Financial Services is subject to numerous laws and regulations in a variety of domestic and international jurisdictions. It is your responsibility to understand the laws applicable to your responsibilities and to comply with both the letter and the spirit of these laws. It is required that you avoid not only actual misconduct but also the appearance of impropriety. Assume that any action you take ultimately could be publicized, and consider how you and the Company would be perceived. When in doubt, stop and reflect. Ask questions. If you are unclear about the application of the law to your responsibilities, or if you are unsure about the legality or integrity of a particular course of action, you must seek the advice of your supervisor or the Law Department. You will be held personally responsible for any improper or illegal acts you commit during your employment at or service to the Company.

Certain significant policies, laws and regulations are highlighted below and additional information may be found in other applicable Company policies and procedures, including the Code of Conduct. This does not constitute a complete listing of the laws, rules, regulations and policies that must be adhered to by every person subject to the Code of Ethics in the conduct of his or her duties at Discover Financial Services.

Anti-Money Laundering; Counter Terrorist Financing Laws; Sanctions. Discover Financial Services is committed to full compliance with federal, state and international laws prohibiting and guarding against money laundering and terrorist financing, as well as with applicable sanctions programs. Discover Financial Services maintains a program to monitor and enforce its policy on anti-money laundering and antiterrorism laws.

Improper and Corrupt Payments; FCPA Violations.The local laws in most countries outside the United States, including the U.K. Bribery Act, and the U.S. Foreign Corrupt Practices Act (FCPA) prohibit providing money or anything else of value to government officials, political parties, candidates for public office, or private sector parties for the purpose of improperly influencing their actions in order to obtain or retain business. In some instances, these laws also prohibit receiving anything of value to obtain a business advantage from a third party. Discover Financial Services is committed to full compliance with the FCPA, the U.K. Bribery Act and other anti-corruption or anti-bribery laws and maintains a program to monitor and enforce its policy regarding these laws.

Fair and Responsible Banking.The Company is committed to making financial services available to customers and prospective customers on a fair and consistent basis, and in a manner that avoids unfair, deceptive or abusive practices in accordance with applicable fair and responsible banking laws and regulations, Company policy and safety and soundness principles. The Company offers and extends all of its products and services to any qualified applicants without discriminating on a prohibited basis. Discover Financial Services maintains a program to monitor and enforce its policy on fair and responsible banking.

ACT IN THE BEST INTERESTS OF CUSTOMERS, THE COMPANY, AND THE PUBLIC

The Company seeks to outperform its competition fairly and honestly through superior performance. Every director, officer, and employee must protect the Company's reputation by dealing fairly with customers, the public, competitors, suppliers, and one another. No one should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, or misrepresentation of facts.

Identifying, Managing, and Reporting Conflicts of Interest

Conflicts of interest may arise as a consequence of the Company's interests and its relationships with multiple customers, counterparties, and suppliers. Conflicts, for example, can occur between different customers and between customers and the Company itself.

Officers and employees are responsible for:

  • identifying and managing conflicts in accordance with regulatory requirements and Company policies; and
  • escalating any potential conflicts to the Chief Compliance Officer or the General Counsel for review and approval.

Once a potential conflict is reviewed and approved, employees and officers must notify the original approving parties promptly of any changes to the business structure of the outside activity, any changes in ownership, or of any changes in participation in an outside activity previously approved at which time the prior approval may be re-evaluated.

Outside Positions

Officers and employees cannot accept an outside position if that position would interfere with the ability to perform work for the Company. While it is not possible to describe every situation in which a potential conflict of interest may arise, the following are examples of situations that do raise a conflict of interest, and therefore must be disclosed to and approved by the General Counsel, and the appropriate management:

  • Taking an outside position with a company or entity that is a vendor, business partner, or competitor of the Company.
  • Serving as a director, trustee, officer, or partner in a paid or unpaid position for a for-profit corporation, other than with the Company.
  • Serving as director, trustee, officer, or partner of a not-for-profit or charitable organization in the financial services industry.
  • Accepting employment or compensation from any organization engaged in the business of financial services.
  • Business and Personal Opportunities

    Your day-to-day responsibilities may expose you to situations that potentially raise personal conflicts of interest. A conflict of interest occurs when your private interest interferes in any way—or even appears to interfere—with the interests of the Company as a whole. For example, a conflict of interest can arise when an employee, officer, or director takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest also arise when an employee, officer, or director (or a member of his or her family) receives improper personal benefits as a result of his or her position in the Company. Avoid any investment, activity, interest, or relationship outside the Company that could impair your judgment or interfere with (or give the appearance of interfering with) your responsibilities on behalf of the Company, its customers, or its shareholders. If a business opportunity arises either because of your position with the Company or using corporate property or information, it belongs to the Company. In addition to the Code of Conduct, the Bank Bribery Act prohibits self-dealing that occurs when an employee conducts business in a manner that places his or her interests above those of the Company.

    While it is not possible to describe every situation in which a potential conflict of interest may arise, the following are examples of situations that may raise a conflict of interest, and therefore must be disclosed to and approved by the General Counsel, and the appropriate management:

    • Accepting special favors or a business opportunity or purchasing for personal use goods and services not available to other persons that is made available as a result of your position with the Company from any person or organization with which the Company has a current or potential business relationship.
    • Taking personal opportunities that are discovered through the use of corporate property, information or position; using corporate property, information or position for personal gain; and competing with the Company. Employees, officers and directors owe a duty to the Company to advance its legitimate interest when the opportunity to do so arises.
    • Acquiring an interest in a transaction involving the Company, a customer, counterparty, or supplier (not including routine investments in publicly traded companies, mutual funds, or employee investment funds managed by the Company).
    • Receiving an improper personal benefit, such as a personal loan or guarantee of an obligation, as a result of your position with the Company, or granting personal loans or giving gifts to other directors, officers, or employees that could make, or might be perceived as making, the recipient beholden to you (over and above repayment of the loan).
    • Making any personal investment in an enterprise if the investment might affect, or appear to affect, your ability to make unbiased business decisions on behalf of the Company.

    Employment of Relatives

    If a hiring employee seeks to hire or engage an immediate family member or his or her company to provide goods or services to the Company, those circumstances must be disclosed to the Chief Compliance Officer or General Counsel. Employees should be sensitive to appearances in situations where a member of their immediate family is employed by a Company's competitor, business partner, or vendor. The Code of Conduct and related policies set forth the conditions under which employees should act to avoid conflicts of interest involving relatives.

    Members of the Board of Directors should also disclose any actual or potential conflicts of interest to the Chairman of the Board and the General Counsel, who shall determine the appropriate resolution. All directors must recuse themselves from any Board discussion or decision affecting their personal, business, or professional interests.

    Gifts and Entertainment

    Gifts and entertainment may create an inappropriate obligation or expectation on the part of the recipient or provider. The Code of Conduct and related Company policies set forth the conditions under which officers, employees, and their family or household members may accept or give gifts or entertainment.

    Giving gifts to or entertaining employees of government and public international organizations may be limited or restricted. Many countries have adopted anti-bribery statutes that prohibit giving anything of value to private sector parties, government officials, government-controlled enterprises, public international organizations, and political parties and candidates, as well as their agents and employees (collectively, "government officials"), in order to secure an improper business advantage. In addition, many government agencies have their own rules governing the acceptance of gifts, travel, and entertainment. Officers and employees must seek review by Corporate Compliance prior to giving gifts or anything else of value to government officials, unless already permitted under written guidance issued by Corporate Compliance.

    Political Contributions

    Generally, the Company does not make corporate contributions to political parties or candidates for public office or other political organizations. The Code of Conduct and related Company policies set forth the conditions under which political contributions may be made.

    ADVANCE AND PROTECT THE COMPANY'S INTERESTS

    Confidential Information

    Confidential information generated and gathered in the course of our business is a valuable asset. Protecting this information is critical to the Company's reputation for integrity and its relationship with its clients, and ensures compliance with regulations governing the financial services industry. All confidential information, regardless of its form or format, must be protected from the time of its creation or receipt until its authorized disposal.

    Confidential information is information (including proprietary information) that you learn, create, or develop in the course of your employment with, or service as a director of, the Company. It includes information that is not generally known to the public about the Company, its affiliates, its employees, its customers, or other parties with whom the Company and its affiliates have a relationship and who have an expectation of confidentiality.

    You must comply with the Company's policies on confidential information. Unauthorized access, use, or distribution of confidential information violates Company policy and could be illegal. Your obligation to protect the confidential information continues even after you leave the Company, and you must return all such information in your possession or control upon your departure.

    Company Systems and Assets

    Company policies regulate use of the Company's systems, including telephones, computer networks, e-mail, instant messaging, and remote access capabilities. Generally, you should only use the Company's systems and property for Company business. Do not access systems or locations that are not reasonably related to your responsibilities with the Company, and report any suspected misuse or theft of Company assets. Under no circumstances should you use the Company's systems to send or store unlawful, discriminatory, harassing, defamatory, or other inappropriate materials.

    PREVENT THE MISUSE OF INSIDE INFORMATION

    You may never, under any circumstances, trade, encourage others to trade, or recommend securities or other financial instruments based on (and in some circumstances, while in the possession of) inside information.

    Inside information is all non-public information about the Company or its customers or counterparties that may have a significant impact on the price of a security or other financial instrument, or that a reasonable investor would be likely to consider important in making an investment decision. The determination of whether non-public information is "inside information" in some circumstances may be complex. Consult with the Law Department if you are uncertain whether particular information is inside information.

    The misuse of inside information may result in corrective action by the Company, up to and including termination of your employment or service, and civil and criminal penalties.

    In order to prevent the misuse of inside information and to avoid both real and perceived conflicts of interest, the Company has established policies and procedures governing personal trading of Discover Financial Services securities by directors, officers, and employees, which may differ depending upon your position at Discover Financial Services. You are required to familiarize yourself and comply with these policies and procedures, as they exist today and any future amendments thereto. If you have any questions about your ability to buy or sell securities, you should contact the Law Department or Corporate Compliance.

    BE HONEST AND FAIR IN YOUR COMMUNICATIONS WITH THE PUBLIC

    The Company has a responsibility under the law to provide accurate and complete disclosure to the investing public, and to the extent that you are involved in the preparation of materials for dissemination to the public, you must ensure that the information is accurate and complete in all material respects. In particular, the Company's senior financial officers, executive officers and directors must endeavor to promote accurate, complete, fair, timely and understandable disclosure in the Company's public communications, including documents that the Company files with or submits to the United States Securities and Exchange Commission and other regulators.

    Officers and employees must consult their business unit or department for standards that apply to oral and written communications with the public, as well as the circumstances under which communications must be reviewed by supervisors and others. If you become aware of a materially inaccurate or misleading statement in a public communication, you must promptly report it in accordance with the procedures outlined in the Enforcement and Administration of the Code of Ethics - Reporting Misconduct section of the Code of Ethics.

    MAINTAIN ACCURATE BOOKS AND RECORDS

    The Company is required to maintain accurate and complete books and records. Every business transaction undertaken by the Company must be recorded on its books accurately and in a timely manner. You must be candid and accurate when providing information for these documents and never make false or misleading entries. In particular, senior financial officers must endeavor to ensure that financial information included in the Company's books and records is correct and complete in all material respects. Records should be retained or destroyed according to Company policies. In accordance with these policies, in the event of litigation, audit or government or Company inquiry, you should consult with the Law Department regarding special record retention requirements.

    TREAT OTHERS WITH DIGNITY AND RESPECT

    The Company is committed to a work environment in which all individuals are treated with dignity and respect. It is the policy of the Company to ensure equal employment opportunity without discrimination or harassment on the basis of race, color, religion, age, gender, gender identity, sexual orientation, national origin, citizenship, disability, marital status, pregnancy (including unlawful discrimination on the basis of a legally protected pregnancy/maternity leave), veteran status, genetic information or any other characteristic protected by law. The Company expects that all relationships among persons in the workplace will be business-like and free of bias, harassment, or violence. The Company also prohibits retaliation against any individual who, in good faith, reports discrimination or harassment, or any individual who participates in, or otherwise supports, an investigation of such reports.

    Misconduct, including discrimination, harassment, retaliation or other forms of unprofessional behavior will not be tolerated. Such behavior, even if not unlawful, will subject you to corrective action by the Company, up to and including termination of your employment or service. In addition, conduct that is unlawful may subject you to civil and criminal penalties.

    Officers and employees are required to comply with all applicable Human Resource policies, as they exist today and any future amendments thereto, and all procedures regarding the reporting of discrimination or harassment.

    PROMOTE A SAFE AND HEALTHY WORKING ENVIRONMENT

    The Company is committed to conducting its business in compliance with all applicable environmental and workplace health and safety laws and regulations. The Company strives to provide a safe and healthy work environment for employees and to avoid adverse impact and injury to the environment and communities in which it conducts its business. Achieving this goal is the responsibility of all directors, officers, and employees.

    ENFORCEMENT AND ADMINISTRATION OF THE CODE OF ETHICS

    Reporting Misconduct

    The Company's reputation for integrity depends upon you. You are the Company's first line of defense against civil or criminal liability and unethical business practices. You have a duty to notify one of the following individuals if you believe you may have violated the law or Company policies or if you observe or become aware of any illegal, unethical, or otherwise improper conduct relating to the Company, or conduct that could have an impact on the Company's reputation: Your Manager, Human Resources, General Counsel, Chief Compliance Officer or Head of Internal Audit.

    If the discussion does not resolve the concern or if you would prefer to report the concern through other channels, you should follow the procedures set forth in the Discover Financial Services Code of Conduct. In particular, you may contact the Integrity Hotline via a toll free telephone number or secured website to report concerns about matters, including accounting, financial reporting, and internal control issues, that do not involve your employment relationship with the Company or discrimination or harassment (for those issues, please refer to the applicable Human Resource policy). Concerns may be reported confidentially and anonymously.

    If your concerns relate to the conduct of the Chief Executive Officer, any other senior executive or financial officer, or a member of the Board of Directors, you also may report your concerns to the General Counsel or the Head of Internal Audit. As appropriate, they will notify the Board of Directors of the allegations. Concerns involving the General Counsel or the Head of Internal Audit may be reported to the Lead Director.

    If you are a supervisor, you have an additional responsibility to take appropriate steps, in consultation with the Law Department to stop any misconduct that you are aware of and to prevent its recurrence. Supervisors who do not take appropriate action may be held responsible for failure to supervise properly.

    Non-Retaliation Commitment

    Discover Financial Services prohibits retaliation for reports or complaints regarding the misconduct of others that were made in good faith. Open communication of issues and concerns by all without fear of retribution is vital to the continued success of the Company.

    Consequences of Violating the Code of Ethics

    If you are an officer or employee, this Code of Ethics, including any future amendments, forms part of the terms and conditions of your employment at the Company. The Code of Ethics is not a contract guaranteeing you employment for a specific duration or entitling you to any special privileges or benefits.

    Directors, officers, and employees are expected to cooperate in internal investigations of allegations of violations of the Code of Ethics and other Company policies. Actual violations may subject you to corrective action up to and including termination. The Company also may report activities to its regulators, which could give rise to regulatory or criminal investigations. The penalties for regulatory and criminal violations may include significant fines and imprisonment.

    Waivers and Amendments

    Any waivers of the provisions of the Code of Ethics for directors or executive officers may be granted only in exceptional circumstances by the Board of Directors, or an authorized committee thereof, and will be promptly disclosed to the Company's shareholders if required by the rules of either the Securities and Exchange Commission or the New York Stock Exchange.

    Amendments to the Code of Ethics also must be approved by the Board of Directors. It is your responsibility to be familiar with the Code of Ethics as it may be revised from time to time.

    YOUR PERSONAL COMMITMENT

    A truly great, visionary company continuously lives and defends its values. Only by doing so can the Company realize the potential of its constituent parts and the talents of its people.

    To reaffirm their commitment, Discover Financial Services requires that directors acknowledge this Code of Ethics and Business Conduct, and that officers and employees acknowledge the Company's Code of Conduct, which is summarized in this Code of Ethics.

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