Gothamist: American Express Becomes a Bank

jimmylegs

Tue, 11 Nov 2008 18:09:23 -0500

ironically, AmEx used to have a bank division which it sold off last year, partially due to some trouble they ran into with the DOJ. ah, hindsight!

Shinobi Shaw

Tue, 11 Nov 2008 14:50:17 -0500

Clearly at the taxpayer's expense. Your MASTERS have mandated and YOU SLAVE will have to fit the bill for them! Now go to work and be a good little SLAVE, your MASTERS commands you!

NannyState

Tue, 11 Nov 2008 13:53:54 -0500

I can't wait to open an account there...and then pull all of my money out at the end of each month.

Spiritof76

Tue, 11 Nov 2008 12:37:09 -0500

So when will AmEx start building branches all over the city?

ken stuart

Tue, 11 Nov 2008 10:53:25 -0500

- why not let these business behemoths go down the tube according to Darwin the way you or I would go down if we couldn't balance the checkbook - we are witnessing government of the people by overly greedy speculators for overly greedy speculators who are trying to convince us it is in our interest that they survive - politicians don't mind giving away incomprehensible amounts of money because it's not their money - to them it's monopoly money - now big business is figuring out how to cover itself when it does badly by coming like Frankenstein hands out to the government - big business has been running the country since the industrial revolution - it takes someone with vision and guts like Teddy Roosevelt or Woodrow Wilson or FDR to stand up to these guys and limit their power where it hurts the guy in the street - let's hope the new President understands the solution to this newest incarnation of the boom bubble bust syndrome lies in more regulation, not in handouts that will never reach hockey Mom - to start, he needs to draw his expert advice from somewhere other than former Democratic administrations and Wall street -

matty

Tue, 11 Nov 2008 10:49:48 -0500

"that to let them fail would be a domino effect" AmEx filing for chapter 11 would have a very limited effect on the ecnonomy. They are not "too big to fail."

NYCSniper

Tue, 11 Nov 2008 10:45:29 -0500

But since the FDIC is in effect "government insurance", why would a bank filing for bankruptcy be disastrous? Seems like all the people's $$$ would theoretically be covered. Not sure I understand the "chain effect" and no one seems to have a solid answer.

babyhitler

Tue, 11 Nov 2008 10:04:48 -0500

the way my friend at Earnst & Young oversight tells me how this works is that these companies have dug so deep inside of the system that to let them fail would be a domino effect. basically they let Lehman die cause it was more responsible but it wasn't more ingrained than AIG who was really irresponsible but it was already in the roots. So in other words to kill the parasite would kill the host as well.

dooWOP

Tue, 11 Nov 2008 10:01:36 -0500

Could this mean perhaps card holders will no longer have to pay the full amount of their balance every month, or is this longstanding requirement by Amex still in effect...?

NYCSniper

Tue, 11 Nov 2008 09:31:36 -0500

And the reason we can't let them file for bankruptcy is...???? This is a serious question. Don't we already have laws and processes for this? And why no bailout for Circuit City?

captainblackout

Tue, 11 Nov 2008 09:31:10 -0500

It's like free candy day in the business world. Wall Street, Detroit and now Amex?! I know each individual person's credit card debt is their own responsibility, but there would be something extremely perverse about the government bailing out an industry that is by definition predatory. Though Amex is a little different, at least they were until they started allowing their card holders to carry balances.

Kojak

Tue, 11 Nov 2008 09:23:55 -0500

American Express should have never have gone into the business of giving out credit except maybe for their charge card customers, who are much less likely to default than their credit customers are. They're even turning their charge cards into quasi-credit cards by offering most purchases to be paid over time. For a company that used to own Lehman Brothers, I'm not surprised by the difficulties they're having. Both companies seem to be run by people with the same mindset: To overextend themselves with no backing by deposits.

ides_of_march

Tue, 11 Nov 2008 09:06:10 -0500

I'm no finance guru so I'll just assume the public is getting screwed somehow. That's what my taxpayer intuition tells me anyway and it's never wrong lately.

sensibile

Tue, 11 Nov 2008 09:05:51 -0500

Can I become a bank too? I'd like to borrow 8 trillion please!