AmEx expects govt action on its credit card fees
Feb 24 (Reuters) - American Express Co disclosed on Friday that it expects federal and state regulators to bring enforcement actions against the company over how it has charged late fees on certain card accounts.
Regulators at the Federal Deposit Insurance Corp and the Utah Department of Financial Institutions have been reviewing the company's practices under consumer protection laws and regulations, American Express said in its annual financial report to the U.S. Securities and Exchange Commission.
The accounts at issue are charge cards which allow customers to carry balances as with credit cards, company spokesman Mike O'Neill said in an interview.
The FDIC has passed on information it gathered to the new U.S. Consumer Financial Protection Bureau, according to the filing. Utah regulators have power over the company because the cards are issued through the company's Utah-chartered Centurion Bank.
"In February 2012, the FDIC notified Centurion Bank that it plans to take formal enforcement action against it, and it appears likely the CFPB and the DFI will take some type of action," according to the filing.
American Express made changes in December in how it assesses late fees on the accounts. It also recorded expenses in the fourth quarter for refunds to customers, O'Neill said. The amount of the expense was considered not material and was not disclosed, he said.
The company said in the filing that it may have to make additional changes, issue more refunds and pay civil penalties that "could adversely affect the company's operations and results."
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