Feb 24 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
"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