American Express Becomes A Bank… And Wants Bailout Money

American Express won U.S. Federal Reserve approval to become a bank holding company — giving it access to the bailout party as credit card defaults climb. Bloomberg News says that the Fed waived the usual 30 day waiting period because (in the words of Fed Chairman Ben Bernanke) we’re experiencing “unusual and exigent circumstances affecting the financial markets.” Today, American Express has requested $3.5 billion in taxpayer-funded capital from the federal government, says the WSJ.

From the Wall Street Journal:

While retailers, car companies and others hit by the slowdown in consumer spending haven’t gotten the government money, financial firms of all kinds are getting federal bailouts.

It isn’t clear if the application under the Troubled Asset Relief Program came before or after the credit- and charge-card giant got Federal Reserve approval Monday to become a bank-holding company.

Amex’s shares are down 57% this year as even affluent consumers keep their plastic in their wallets. The WSJ says that it is unclear how Amex would use the money — and that it’s clear that $3.5 billion won’t help with the consumer spending slump.

Notoriously slime-filled credit card issuer Capital One has already received approval for $3.5 billion in bailout cash.

AmEx Said to Request $3.5 Billion in U.S. Aid [WSJ] (Thanks, Jameson!)
American Express Wins Fed Approval to Become Bank (Update1) [Bloomberg]