- Centurion Member
- Posts: 707
- Joined: Tue Sep 22, 2009 1:15 pm
- Location: Arizona
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.