Springleaf Holdings will be allowed to proceed with its purchase of OneMain Financial Holdings, but will first have to sell 127 branches of the merged company, including six in West Virginia.
Both financial services companies specialize in personal loans to subprime borrowers.
Springleaf and OneMain operated in the same area in six West Virginia cities - South Charleston, Barboursville, Lewisburg, Logan, Oak Hill and Princeton - and will have to sell locations in each of those cities.
Without the settlement, and the forced sales, the overlapping locations of the merged company would have resulted in fewer choices for consumers and reduced competition.
The companies reached an agreement with the U.S. Justice Department, West Virginia Attorney General Patrick Morrisey and the attorneys general of six other states.
"The settlement will provide an opportunity for Lendmark to enter the market, alleviating the competitive concerns created by the proposed transaction," Morrisey said in a news release.
Springleaf's purchase of OneMain is valued at about $4.25 billion.
Combined, the two companies have nearly 2,000 branches.
The settlement is still subject to approval by federal court in Washington.