American Express Bank - WTF?

American Express forum. Talk about AmEx credit cards like Blue, Gold, Platinum, Centurion, and more.
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Cucumber
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American Express Bank - WTF?

Postby Cucumber » Wed Nov 18, 2009 2:36 am

Have you guys seen this?! American Express is now going into bank accounts and savings. They want to have $10 bil in deposits within four years. What's up with that? Now I'm worried their customer service will go down when they try and become the next Citi or BofA.

American Express seeks to build up retail bank | Industry Summits | Reuters
OBAMA
Stop talking crap about him!


DoingHomework
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Postby DoingHomework » Wed Nov 18, 2009 5:34 pm

AMEX decided to become a bank last fall to get TARP money.

I'm not sure if I would worry about this. There are technical advantages to being a bank including being able to borrow from the federal reserve cheaper than from other sources. But you can't just declare yourself a bank and reap all the benefits. You have to have certain deposit threshholds. I think that is all they are trying to do. It could end up being a very good thing for customers but we will have to wait and see.

Walmart was also thinking of becoming its own bank a while back just to save on the fees it pays to banks from credit card processing. You can bet a lot of banks were worried about Walmar competing with them at very low prices.

I would not worry about AMEX or Walmart becoming another Citi. If anything it is going to be extremely difficult for any bank to get that large in the future. I doubt BofA or Citi will be broken up, though it has been talked about, but I also doubt any bank will be allowed to get so big again without severe restrictions that they will not want to deal with including consumer protections.

DoingHomework
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Postby DoingHomework » Wed Nov 18, 2009 5:38 pm

Yep, I read the article after my first posting. That's all they are doing - looking for a cheap and reliable source of funding to back charges people make. I bet they will get most of their deposits throuh CDs they get through Ameriprise or CDs they sell directly. That could actually be a very good thing for card holders.

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Postby incomegenerator » Tue Mar 30, 2010 6:20 pm

I just stumbled upon this the other day:

"American Express Bank, FSB" is currently offering higher yield APY's for savings accounts(1.30%) and CD's(2.0%)

Everything is done online (or through mail) as they don't have brick and morter outlets, though.

If their rates stay like this for a while I just might open an account.



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