American Express (AXP) Subsidiaries Enter Separate Settlement Agreement with FDIC, OTS; Sees $3.5M Payment
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American Express Company (NYSE: AXP) reported today that its wholly-owned subsidiaries, American Express Centurion Bank and American Express Bank, FSB, have entered into separate settlement agreements with the FDIC and the Office of Thrift Supervision, respectively.
The settlements are related to convenience checks used by certain cardmembers, which were declined as a result of a change in the cardmember's risk profile. Pursuant to the terms of the settlements agreed to with the FDIC and the OTS, AECB and AEBFSB have each agreed to pay a civil money penalty of $250,000 and have agreed to make payments to qualifying cardmembers for fees that may have been incurred as a result of the Banks' declining the convenience checks. Such payments are expected to total approximately $3.5 million.
Pursuant to the terms of the settlements, the Banks have also agreed to modify certain practices of their convenience check programs and disclosures and to assist qualifying cardmembers in the removal of their respective names from any "bad check" registry or similar database. In reaching ettlements with the FDIC and the OTS, neither AECB nor AEBFSB has admitted or denied any violations of law.
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