X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK — Longtime card issuer American Express has received federal approval to become a bank holding company and has reportedly sought $3.5 billion in bailout money from the U.S. Treasury Department, according to the company and press reports.In an announcement of its change in status, American Express CEO Kenneth Chenault indicated that the need for capital was paramount in the decision.“Given the continued volatility in the financial markets, we want to be best positioned to take advantage of the various programs the federal government has introduced or may introduce to support U.S. financial institutions,” Chenault said. “We will continue to build a larger deposit base to broaden our funding sources. With Federal Reserve oversight we should gain greater access to the capital on offer under the current and any future government-sponsored programs. This decision to become a bank holding company does not fundamentally change American Express’ core focus on the payments industry, nor will it require any significant divestitures,” he added.The company already has two subsidiary banks, American Express Centurion Bank, an industrial loan bank chartered in Utah, and American Express Bank FSB, a federal savings bank.Card analysts say the card brand, which has traditionally focused primarily on higher end cardholders, became vulnerable to the impact of economic downturns after it changed it its card issuing model to resemble that of more traditional credit card issuers

Children a Source of Card Fraud

Peter Westerman

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.