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104-470: A year before the law was passed, Citicorp , a commercial bank holding company , merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup , a corporation combining banking, securities and insurance services under a house of brands that included Citibank , Smith Barney , Primerica , and Travelers . Because this merger was a violation of the Glass–Steagall Act and

208-620: A terracotta seal with the American Express Eagle. In 1890–91 the company constructed a new ten-story building by Edward H. Kendall on the site of its former headquarters on Hudson Street . By 1903, the company had assets of some $ 28 million, second only to the National City Bank of New York among financial institutions in the city. To reflect this, the company purchased the Broadway buildings and site. At

312-592: A 4.61% worldwide market share by payment volume in 2022, compared to 38.73% for Visa and 24% for Mastercard. While American Express credit cards are accepted at 99% of US merchants that accept credit cards ( Costco being a notable exception), they are much less accepted in Europe and Asia. American Express offers various types of cards including travel and dining cards, everyday spending points cards, and cash back cards. Each category has several card options with different benefits and reward structures. High-profile cards like

416-672: A better solution than the letter of credit. Berry introduced the American Express Traveler's Cheque which was launched in 1891 in denominations of $ 10, $ 20, $ 50, and $ 100. Traveler's cheques established American Express as a truly international company. In 1914, at the onset of World War I , American Express in Europe was among the few companies to honor the letters of credit (issued by various banks) held by Americans in Europe, because other financial institutions refused to assist these stranded travelers. The British government appointed American Express its official agent at

520-462: A commercial/retail bank ultimately drove the banking industry to back the GLBA restrictions. Some restrictions remain to provide some amount of separation between the investment and commercial banking operations of a company. For example, licensed bankers must have separate business cards, e.g., "Personal Banker, Wells Fargo Bank" and "Investment Consultant, Wells Fargo Private Client Services". Much of

624-486: A few years earlier, commercial Banks were allowed to pursue investment banking, and before that banks were also allowed to begin stock and insurance brokerage. Insurance underwriting was the only main operation they weren't allowed to do, something rarely done by banks even after the passage of the Act. The Act further enacted three provisions that allow for bank holding companies to engage in physical commodity activities. Prior to

728-724: A financial services holding company and made several acquisitions, creating an investment banking arm. In mid-1981 it purchased Sanford I. Weill 's Shearson Loeb Rhoades , the second-largest securities firm in the United States to form Shearson/American Express . Shearson Loeb Rhoades itself was the culmination of several mergers in the 1970s as Weill's Hayden, Stone & Co. merged with Shearson, Hammill & Co. in 1974, to form Shearson Hayden Stone . Shearson Hayden Stone then merged with Loeb, Rhoades, Hornblower & Co. (formerly Loeb, Rhoades & Co. ) to form Shearson Loeb Rhoades in 1979. With capital totaling $ 250 million at

832-460: A joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November. On November 4, the final bill resolving the differences

936-447: A large branch and backshop footprint. Banks have recently tended to buy other banks, such as the 2004 Bank of America and Fleet Boston merger, yet they have had less success integrating with investment and insurance companies. Many banks have expanded into investment banking , but have found it hard to package it with their banking services, without resorting to questionable tie-ins which caused scandals at Smith Barney . Crucial to

1040-601: A limit of 18% (the minimum usury limit in Texas) or more on all other loans. However, once Wells Fargo fully completed its purchase of Century Bank (a Texas bank with Arkansas branches), Section 731 did away with all usury limits for Arkansas-based banks since Wells Fargo's main bank charter is based in South Dakota , which repealed its usury laws many years ago. Though designed for Arkansas, Section 731 may also apply to Alaska and California whose constitutions provide for

1144-534: A local bank card clearing business license in China. In a court case Ohio v. American Express Co. (2018), merchants filed a class action lawsuit against American Express and claimed that charging high fees to merchants is a violation of the Sherman Antitrust Act . According to the lawsuit, American Express charges significantly higher fees than other credit card providers. In January 2017,

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1248-407: A privacy notice at the time the consumer relationship is established and annually thereafter. The privacy notice must explain the information collected about the consumer, where that information is shared, how that information is used, and how that information is protected. The notice must also identify the consumer's right to opt out of the information being shared with unaffiliated parties pursuant to

1352-540: A result of antitrust litigation brought by the United States Department of Justice . In January 2004, American Express reached a deal to have its cards issued by MBNA . Initially decried by Mastercard executives as nothing but an "experiment", the cards were issued beginning in October 2004. An agreement was reached regarding the acquisition of MBNA by Bank of America whereby Bank of America owned

1456-457: A risk analysis on their current processes. The Federal Register features approaches for risk assessments such as evaluating the likelihood of magnitudes of harm that result from threats and errors and safeguards are commensurate with the risks they address. No process is perfect, so this has meant that every financial institution has had to make some effort to comply with the GLBA . In December 2021,

1560-414: A tightly controlled, single-use card number. In March 2008, Standard Chartered Bank acquired American Express Bank Ltd, the international banking subsidiary of American Express for $ 823 million. On November 10, 2008, during the 2007–2008 financial crisis , the company received Federal Reserve System approval to convert to a bank holding company , making it eligible for government assistance under

1664-445: A written information security plan that describes how the company is prepared for, and plans to continue to protect its clients' nonpublic personal information. The Safeguards Rule applies to information of any consumer's past or present regarding the financial institution's products or services. The written plan must include: The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do

1768-668: Is one of the largest US banks , and is ranked 77th on the Fortune 500 and 28th on the list of the most valuable brands by Forbes . In 2023, it was ranked 63rd in the Forbes Global 2000 . Amex also owns a direct bank . Founded in 1850 as a freight forwarding company, Amex introduced financial and travel services during the early 1900s. It developed its first paper charge card in 1958, gold card in 1966, green card in 1969, platinum card in 1984, and Centurion Card in 1999. The "Don't Leave Home Without It" advertising campaign

1872-468: Is a consumer who has a "customer relationship" with a financial institution. A "customer relationship" is a continuing relationship with a consumer. Examples of establishing a customer relationship: "Special Rule" for Loans: The customer relationship travels with ownership of the servicing rights. Under the GLB , financial institutions must provide their clients a privacy notice that explains what information

1976-676: Is an American bank holding company and multinational financial services corporation that specializes in payment cards . It is headquartered at 200 Vesey Street , also known as American Express Tower, in the Battery Park City neighborhood of Lower Manhattan . Amex is the fourth-largest card network globally based on purchase volume, behind China UnionPay , Visa , and Mastercard . 141.2 million Amex cards were in force worldwide as of December 31, 2023, with an average annual spend per card member of US$ 24,059. That year, Amex handled over $ 1.7 trillion in purchase volume on its network. Amex

2080-562: Is legal under the usury laws of any of those states may be made by an Arkansas-based bank under Section 731. The section does not apply to interstate banks with branches in the covered state, but headquartered elsewhere; however, Arkansas-based interstate banks like Arvest Bank may export their Section 731 limits to other states. Due to Section 731, it is generally regarded that Arkansas-based banks now have no usury limit for credit cards or for any loan of greater than $ 2,000 (since Alabama, Regions' home state, has no limits on those loans), with

2184-538: The American Bureau of Shipping , a maritime concern (1977–86), and later J.J. Kenny, and Standard & Poor's , the latter of which renamed the building for itself. American Express extended its reach nationwide by arranging affiliations with other express companies (including Wells Fargo – the replacement for the two former companies that merged to form American Express), railroads, and steamship companies. In 1857, American Express started its expansion in

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2288-553: The American Railway Express Agency formed in July 1918. The new entity took custody of all the pooled equipment and property of existing express companies (the largest share of which, 40%, came from American Express, who had owned the rights to the express business over 71,280 miles (114,710 km) of railroad lines, and had 10,000 offices, with over 30,000 employees). American Express executives discussed

2392-929: The Arkansas Constitution and could not be changed by the Arkansas General Assembly . When the Office of the Comptroller of the Currency ruled that interstate banks established under the Riegle–Neal Interstate Banking and Branching Efficiency Act of 1994 could use their home state's usury law for all branches nationwide with minimal restrictions, Arkansas-based banks were placed at a severe competitive disadvantage to Arkansas branches of interstate banks; this led to out-of-state takeovers of several Arkansas banks, including

2496-668: The Bank Holding Company Act of 1956 , the Federal Reserve gave Citigroup a temporary waiver in September 1998. Less than a year later, GLBA was passed to legalize these types of mergers on a permanent basis. The law also repealed Glass–Steagall's conflict of interest prohibitions "against simultaneous service by any officer, director, or employee of a securities firm as an officer, director, or employee of any member bank." The banking industry had been seeking

2600-484: The Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343–86 (Republicans 205–16; Democrats 138–69; Independent 0–1), two months after the Senate had already passed its version of the bill on May 6 by a much narrower 54–44 vote along basically partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed). When the two chambers could not agree on a joint version of

2704-530: The GDPR as well as US GLBA requirements. Individualized requests for privacy under the GLBA are likely to include provisions guaranteed by the European Union 's GDPR . (Subtitle A: Disclosure of Nonpublic Personal Information, codified at 15 U.S.C.   §§ 6801 – 6809 ) The Safeguards Rule implements data security requirements from the GLBA and requires financial institutions to develop

2808-420: The GDPR includes provision on scope of data collection, but also includes right of access , right to erasure , right to restriction of processing and right to data portability. Due to the multinational nature of some transactions, including data and internet transactions, and the possible implementation of corresponding regulations in some US states, it is likely that business and other entities will comply with

2912-433: The GLB depending upon the type of business and the activities utilizing individual's personal nonpublic information. Definition: A "consumer" is an individual who obtains or has obtained a financial product or service from a financial institution that is to be used primarily for personal, family, or household purposes, or that individual's legal representative. Examples of consumer relationships: Definition: A "customer"

3016-426: The GLB . A customer is not someone using an automated teller machine (ATM) or having a check cashed at a cash advance business. These are not ongoing relationships like a customer might have—i.e., a mortgage loan , tax advising, or credit financing. A business is not an individual with personal nonpublic information, so a business cannot be a customer under the GLB . A business, however, may be liable for compliance to

3120-694: The Tribeca section of Manhattan. For years it enjoyed a virtual monopoly on the movement of express shipments (goods, securities, currency, etc.) throughout New York State. In 1874, American Express moved its headquarters to 65 Broadway in what was becoming the Financial District of Manhattan, a location it was to retain through two buildings. In 1854, the American Express Co. purchased a lot on Vesey Street in New York City as

3224-648: The Troubled Asset Relief Program . At that time, American Express had total consolidated assets of about $ 127 billion. In June 2009, $ 3.39 billion in TARP funds were repaid plus $ 74.4 million in dividend payments. In July 2009, the company ended its obligations under TARP by buying back $ 340 million in Treasury warrants. As part of the conversion, the company reduced or closed many business lines of credit. In 2009, American Express introduced

Gramm–Leach–Bliley Act - Misplaced Pages Continue

3328-478: The $ 226 million credit card portfolio of Bank of Hawaii , then a division of Pacific Century Financial Corporation In January 2006, American Express sold its Bank of Hawaii card portfolio to Bank of America ( MBNA ). Until 2004, Visa and Mastercard rules prohibited issuers of their cards from issuing American Express cards in the United States. This meant, as a practical matter, that U.S. banks could not issue American Express cards. These rules were struck down as

3432-800: The 1980s, began accepting cards using the Visa and Mastercard payment networks. In 2011, Amex launched the Blue Cash Preferred Card credit card. In October 2012, The Consumer Financial Protection Bureau (CFPB) required three American Express subsidiaries to refund an estimated $ 85 million to approximately 250,000 customers for illegal card practices between 2003 and 2012. Allegations included that American Express made misleading statements regarding signup bonuses, charged unlawful late fees, discriminated against applicants due to age, and failed to report consumer complaints to regulators. Also in October 2012, American Express and Walmart announced

3536-532: The 2nd U.S. Circuit Court of Appeals affirmed a lower court ruling that American Express could block merchants that accept its cards from steering customers to other cards, like those offered by Visa and Mastercard. In June 2018, the Supreme Court of the United States affirmed the 2nd Circuit's ruling. In 2018, the Gold Card was converted to a credit card for UK residents, but remains a charge card in

3640-662: The Act " folk economics ." A New York Times financial columnist and occasional critic of GLBA Andrew Ross Sorkin stated that he believes GLBA had little to do with the failed institutions. Citicorp Too Many Requests If you report this error to the Wikimedia System Administrators, please include the details below. Request from 172.68.168.133 via cp1102 cp1102, Varnish XID 549538824 Upstream caches: cp1102 int Error: 429, Too Many Requests at Thu, 28 Nov 2024 05:48:59 GMT American Express The American Express Company or Amex

3744-571: The American Express Travelers Cheque Card, a stored-value card that serves the same purposes as a traveler's cheque, but can be used in stores like a credit card. Amex discontinued the card in October 2007. On September 30, 2005, American Express completed the corporate spin-off of its American Express Financial Advisors unit, Ameriprise Financial , to its shareholders and RSM McGladrey acquired American Express Tax & Business Services (TBS). In 2006,

3848-618: The American Express network. American Express was, at the time, known for cutting its interchange fee to merchants and restaurants if they accepted only American Express and no other credit or charge cards. This prompted competitors such as Visa and Mastercard to file complaints as the tactics gave Amex exclusivity at restaurants. Capitalizing on this elitist image, American Express frequently mentioned such exclusive partnerships in its advertising. Aside from some holdouts including Neiman Marcus , which continued exclusivity until 2011,

3952-526: The Costco card accounts was significant; in the first quarter without Costco cards, company profit dropped 10% and revenue dropped 5% compared to the previous year. On March 1, 2017, ANZ announced that it was no longer issuing American Express cards, with them phased out entirely by August 5, 2017. In October 2017, American Express established a joint venture company, LianTong ( 连通 ), in China to operate its payment card brand locally. In June 2020, it obtained

4056-460: The Fee Party's legal bills, and Discover Card was able to increase their acceptance among Boston restaurants by 375%. Kenneth Chenault , then head of Travel Related Services prior to becoming American Express CEO, cut fees to bring these restaurants back into the fold. American Express then shifted its focus from exclusivity to broadening acceptance, adding mainstream merchants like Walmart to

4160-499: The First World War, the 21-story neo-classical American Express Co. Building was constructed in 1916–17 to the design of James L. Aspinwall, of the firm of Renwick, Aspinwall & Tucker, the successor to the architectural practice of James Renwick Jr. The building consolidated the two lots of the former buildings with a single address: 65 Broadway . This building was part of the "Express Row" section of lower Broadway at

4264-475: The Gramm–Leach–Bliley Act softened the impact of the crisis. Atlantic Monthly columnist Megan McArdle has argued that if the act was "part of the problem, it would be the commercial banks, not the investment banks, that were in trouble" and repeal would not have helped the situation. An article in the conservative publication National Review has made the same argument, calling allegations about

Gramm–Leach–Bliley Act - Misplaced Pages Continue

4368-575: The Green, Gold, and Platinum cards cater to frequent travelers and diners with perks tailored to these activities. In 1850, American Express was started as a freight forwarding company in Buffalo, New York . It was founded as a joint-stock corporation by the merger of the cash-in-transit companies owned by Henry Wells (Wells & Company), William G. Fargo (Livingston, Fargo & Company), and John Warren Butterfield (Wells, Butterfield & Company,

4472-551: The ICC was drawn to its strict control of the railroad express business. However, the solution did not come immediately to hand. The solution to this problem came as a coincidence to other problems during World War I. During the winter of 1917, the United States suffered a severe coal shortage and on December 26 President Woodrow Wilson commandeered the railroads on behalf of the United States government to move federal troops, their supplies, and coal. Treasury Secretary William Gibbs McAdoo

4576-873: The Safeguards Rule was updated, amid some controversy, by the FTC to include specific criteria requiring financial institutions to introduce new security controls and to increase the accountability of boards of directors , with a six-month compliance extension, from January to June 2023, granted for some types of institutions in November 2022. (Subtitle B: Fraudulent Access to Financial Information, codified at 15 U.S.C.   §§ 6821 – 6827 ) Pretexting (sometimes referred to as "social engineering") occurs when someone tries to gain access to personal nonpublic information without proper authority to do so. This may entail requesting private information while impersonating

4680-458: The Shearson family, creating Shearson Lehman/American Express. Lehman CEO and former trader Lewis Glucksman became CEO of Shearson Lehman/American Express. In 1984, Shearson/American Express acquired Investors Diversified Services (IDS), bringing with it a fleet of financial advisors and investment products. In 1988, Shearson Lehman acquired the E.F. Hutton & Co. , a brokerage firm that

4784-889: The UK division of American Express joined the Product Red coalition and issued a Red Card, donating with each purchase through The Global Fund to Fight AIDS, Tuberculosis and Malaria to help African women and children with HIV/AIDS, malaria, and other diseases. In late 2007, the company announced the Plum Card for small business owners. In March 2008, American Express acquired the Corporate Payment Services business of General Electric , which primarily focused on providing purchasing card solutions for large global clients, for $ 1.1 billion in cash. The transaction added V-Payment to its product portfolio. V-Payment enables

4888-644: The United States, and in 2015 in Canada, Costco ended its relationship with Amex that had provided co-branded Costco membership cards since 2004. The cards issued by Costco in the United States were an extension of an exclusive deal between Costco and American Express dating from 1999. Costco was the last major US merchant that accepted American Express cards exclusively. Costco's Canadian stores ended its exclusive deal with American Express in January 2015, in favor of one with Capital One and Mastercard. Citigroup became

4992-573: The ZYNC charge card, a white card targeting young adults. The card was later discontinued. In November 2010, the UK division of American Express was cautioned by the Office of Fair Trading for the use of controversial charging orders against those in debt. The company was one of four companies who were allegedly encouraging customers to turn their unsecured credit card debts into a form of secured debt. In November 2011, Neiman Marcus , which gave general-purpose card exclusivity to American Express since

5096-468: The [initial] effort to "develop" the curriculum for such employee training. Under United States law, pretexting by individuals is punishable as a common law crime of false pretenses . Section 731 of the GLB, codified as subsection (f) of 12 U.S.C.   § 1831u , contains a unique provision aimed at Arkansas , whose usury limit was set at five percent above the Federal Reserve discount rate by

5200-483: The account holder, by telephone, by mail, by e-mail, or even by " phishing " (i.e., using a phony website or email to collect data). GLBA encourages the organizations covered by GLBA to implement safeguards against pretexting. For example, a well-written plan designed to meet GLB's Safeguards Rule ("develop, monitor, and test a program to secure the information") would likely include a section on training employees to recognize and deflect inquiries made under pretext. In fact,

5304-575: The area of financial services by launching a money order business to compete with the United States Post Office 's money orders. Sometime between 1888 and 1890, J. C. Fargo took a trip to Europe and returned frustrated and infuriated. Despite the fact that he was president of American Express and that he carried with him traditional letters of credit , he found it difficult to obtain cash anywhere except in major cities. Fargo went to Marcellus Flemming Berry and asked him to create

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5408-586: The bank. Safra then opened a competing bank. In response, American Express launched an international smear campaign against Safra by inaccurately reporting to news and media outlets in that Safra was being investigated by the FBI for being involved in the Iran–Contra affair , along with drug trafficking and the mafia. All of the accusations were confirmed to be false and led to the resignation of Harry L. Freeman, public relations chief of American Express, after admitting to

5512-479: The beginning of World War I. They were to deliver letters, money, and relief parcels to British prisoners of war. Their employees went into camps to cash drafts for both British and French prisoners and arranged for them to receive money from home. By the end of the war they were delivering 150 tonnes of parcels per day to prisoners in six countries. In 1915, American Express established a travel division and soon established its first travel agency . Albert K. Dawson

5616-610: The bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001. During debate in the House of Representatives , Rep. John Dingell ( Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government. The House passed its version of

5720-472: The bill, the House voted on July 30 by a vote of 241–132 (R 58–131; D 182–1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining ). The bill then moved to

5824-571: The budding Financial District and into rented offices in two five-story brownstone commercial buildings at 63 and 65 Broadway that were owned by the Harmony family. In 1880, American Express built a new warehouse behind the Broadway Building at 46 Trinity Place. The designer is unknown, but it has a façade of brick arches that are reminiscent of pre-skyscraper New York. American Express has long been out of this building, but it still bears

5928-426: The charge in offering all types of financial services products in 1986. American Express attempted to own participants in almost every field of financial business (although there was little synergy among them). Things culminated in 1998 when Citibank merged with The Travelers Companies , creating Citigroup . The merger violated the Bank Holding Company Act (BHCA), but Citibank was given a two-year forbearance that

6032-403: The client to read or scroll through the notice and check a box to accept terms. The privacy notice must also explain to the customer the opportunity to 'opt out'. Opting out means that the client can say "no" to allowing their information to be shared with nonaffiliated third parties. The Fair Credit Reporting Act is responsible for the 'opt-out' opportunity, but the privacy notice must inform

6136-443: The company gathers about the client, where this information is shared, and how the company safeguards that information. This privacy notice must be given to the client prior to entering into an agreement to do business. There are exceptions to this when the client accepts a delayed receipt of the notice in order to complete a transaction on a timely basis. This has been somewhat mitigated due to online acknowledgement agreements requiring

6240-439: The company. In 1979, American Express acquired 50% of the cable subsidiary of Warner Communications , forming Warner-Amex Satellite Entertainment , for $ 175 million in cash and short-term notes. It owned two-thirds of MTV , Nickelodeon , and The Movie Channel . The venture was unprofitable, and, in 1985, Amex sold its 50% interest to Viacom for $ 450 million. In the 1980s, American Express embarked on an effort to become

6344-481: The creation of giant financial supermarkets that could own investment banks, commercial banks and insurance firms, something banned since the Great Depression. Its passage, critics also say, cleared the way for companies that were too big and intertwined to fail . Economist Joseph Stiglitz has also argued that the Act increased risk-taking leading up to the crisis, stating "the culture of investment banks

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6448-506: The customer loans and American Express processed the transactions. American Express dismissed Bank of America from its antitrust litigation against Visa, Mastercard, and other banks. The first card from the partnership, the Bank of America Rewards American Express card, was released on June 30, 2006. In June 2005, American Express introduced ExpressPay, a contactless payment system based on wireless RFID . In July 2005, American Express issued

6552-543: The customer of this right under the GLB. The client cannot opt out of: Notice requirements may vary. In most cases, service of a GLBA notice is not necessary unless the entity serving the notice intends to "share" customer information, which the FTC defines as, "non-public personal information (NPI)", of customers required to be protected under GLBA . A consumer may react to service of a GLBA notice by: The European Union's General Data Protection Regulation (GDPR) became enforceable on 25 May 2018. As applies to consumers,

6656-1136: The debate about financial privacy is specifically centered around allowing or preventing the banking, brokerage, and insurances divisions of a company from working together. In terms of compliance , the key rules under the Act include The Financial Privacy Rule which governs the collection and disclosure of customers' personal financial information by financial institutions. It also applies to companies, regardless of whether they are financial institutions, that receive such information. The Safeguards Rule requires all financial institutions to design, implement and maintain safeguards to protect customer information. The Safeguards Rule applies not only to financial institutions that collect information from their own customers, but also to financial institutions – such as credit reporting agencies, appraisers, and mortgage brokers – that receive customer information from other financial institutions. (Subtitle A: Disclosure of Nonpublic Personal Information, codified at 15 U.S.C.   §§ 6801 – 6809 ) The Financial Privacy Rule requires financial institutions to provide each consumer with

6760-456: The economy turns bad. With the new Act, they would be able to do both 'savings' and 'investment' at the same financial institution, which would be able to do well in both good and bad economic times. Prior to the Act, most financial services companies were already offering both saving and investment opportunities to their customers. On the retail/consumer side, a bank called Norwest Corporation , which would later merge with Wells Fargo Bank , led

6864-429: The enactment of the Act those activities were limited to those that were so closely related to banking to be considered incidental to it. Under GLBA depending on the provision the institution falls into, bank holding companies can engage in physical commodity trading, energy tolling, energy management services, and merchant banking activities. Much consolidation occurred in the financial services industry since, but not at

6968-468: The end of the Wells-Fargo reign in 1914, an aggressive new president, George Chadbourne Taylor (1868–1923), who had worked his way up through the company over the previous thirty years, decided to build a new headquarters. The old buildings, dubbed by The New York Times as "among the ancient landmarks" of lower Broadway, were inadequate for such a rapidly expanding concern. After some delays due to

7072-483: The entire scandal. In July 1989, American Express publicly apologized to Edmond Safra and donated $ 8 million to the charity of his choice. In 1990, American Express sold its Swiss banking operations to Compagnie de Banque et d'Investissements, which led to the creation of Union Bancaire Privée (UBP). In 1984, Amex launched the Platinum Card, billed as an "ultra-exclusive" credit card with a $ 250 annual fee. It

7176-410: The evaluation of the effectiveness of such employee training probably should include a follow-up program of random spot checks, "outside the classroom", after completion of the [initial] employee training, in order to check on the resistance of a given (randomly chosen) student to various types of "social engineering"—perhaps even designed to focus attention on any new wrinkle that might have arisen after

7280-536: The exclusive issuer of Costco's credit cards and Visa replaced American Express as the exclusive credit card accepted at Costco's stores in the United States. All TrueEarnings card accounts and balances held by American Express were sold to Citigroup, and new Costco Anywhere Visa cards were sent to Costco members prior to the switch date. The Costco partnership represented 8%, or $ 80 billion, of American Express' billed business and about 20%, or about $ 14 billion, of its interest-bearing credit portfolio. The impact of losing

7384-412: The few banks that did merge weathered the crisis better than those that did not. In February 2009, one of the act's co-authors, former Senator Phil Gramm, also defended his bill: [I]f GLB was the problem, the crisis would have been expected to have originated in Europe where they never had Glass–Steagall requirements to begin with. Also, the financial firms that failed in this crisis, like Lehman , were

7488-775: The financial privacy rule provides for a privacy policy agreement between the company and the consumer pertaining to the protection of the consumer's personal nonpublic information. On November 17, 2009, eight federal regulatory agencies released the final version of a model privacy notice form to make it easier for consumers to understand how financial institutions collect and share information about consumers. GLBA defines financial institutions as: "companies that offer financial products or services to individuals, like loans, financial or investment advice, or insurance". The Federal Trade Commission (FTC) has jurisdiction over financial institutions similar to, and including, these: These companies must also be considered significantly engaged in

7592-440: The financial service or production that defines them as a "financial institution". Insurance has jurisdiction first by the state, provided the state law at minimum complies with the GLB. State law can require greater compliance, but not less than what is otherwise required by the GLB. The Gramm–Leach–Bliley Act defines a "consumer" as A customer is a consumer that has developed a relationship with privacy rights protected under

7696-499: The high-fee Centurion Card , often referred to as the "black card," which caters to an even more affluent customer segment. The card was initially available only to select users of the Platinum card. American Express created the card line amid rumors and urban legends in the 1980s that it produced an ultra-exclusive black card for elite users who could purchase anything with it. In December 2000, American Express agreed to acquire

7800-603: The launch of Bluebird, a prepaid debit card with roadside assistance and identity theft protection that can also be used as a substitute for a traditional transactional account whereby users can have payments deposited to the account and have insurance from the Federal Deposit Insurance Corporation . In October 2013, Amex sold most of its publications: Travel + Leisure , Food & Wine , Executive Travel , Black Ink , and Departures magazines, to Time Inc. Time restructured

7904-562: The least diversified and the ones that survived, like J.P. Morgan , were the most diversified. Moreover, GLB did not deregulate anything. It established the Federal Reserve as a superregulator, overseeing all Financial Services Holding Companies. All activities of financial institutions continued to be regulated on a functional basis by the regulators that had regulated those activities prior to GLB. Bill Clinton , as well as economists Brad DeLong and Tyler Cowen have all argued that

8008-411: The legislation feared that, with the allowance for mergers between investment and commercial banks, GLBA allowed the newly-merged banks to take on riskier investments while at the same time removing any requirements to maintain enough equity, exposing the assets of its banking customers. Calabria claimed that, prior to the passage of GLBA in 1999, investment banks were already capable of holding and trading

8112-455: The official launch date. The card was launched with an annual fee of $ 6, $ 1 higher than Diners Club, to be seen as a premium product. The first cards were made of paper, with the account number and card member's name typed. In 1959, American Express became the first company to issue embossed plastic cards. In 1966, American Express introduced the Gold Card for "big-spending members". In 1977, James D. Robinson III became chairman and CEO of

8216-502: The passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a "less than satisfactory [ sic ] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA). This

8320-472: The possibility of launching a travel charge card as early as 1946, but it was not until Diners Club launched a card in March 1950, that American Express began to seriously consider the possibility. At the end of 1957, under American Express CEO Ralph Reed the company entered the business and by the launch date of October 1, 1958, public interest had become so significant that 250,000 cards were issued prior to

8424-460: The practice largely ended in 1991. In April 1992, American Express spun off First Data in an initial public offering . In 1993, Harvey Golub became CEO of American Express. That year, American Express negotiated the sale of Shearson's retail brokerage and investment management business to Primerica . The Shearson business was merged with Primerica's Smith Barney to create Smith Barney Shearson . In June 1994, American Express completed

8528-492: The provisions of the Fair Credit Reporting Act . Should the privacy policy change at any point in time, the consumer must be notified again for acceptance. Each time the privacy notice is reestablished, the consumer has the right to opt out again. The unaffiliated parties receiving the nonpublic information are held to the acceptance terms of the consumer under the original relationship agreement. In summary,

8632-419: The publications, which are now owned by Dotdash Meredith . In 2013, the company opened its first airport lounge, offering access to certain cardmembers. In March 2014, American Express announced the corporate spin-off its corporate travel business as American Express Global Business Travel and the sale of 50% of the business to an investor group led by Certares LP for $ 900 million. Effective in 2016 in

8736-603: The repeal of the 1933 Glass–Steagall Act since the 1980s, if not earlier. In 1987 the Congressional Research Service prepared a report that explored the cases for and against preserving the Glass–Steagall Act. Respective versions of the Financial Services Act were introduced in the U.S. Senate by Phil Gramm ( Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with

8840-534: The sale of First Commercial Bank (then Arkansas' largest bank) to Regions Financial Corporation in 1998. Under Section 731, all banks headquartered in a state covered by that law may charge up to the highest usury limit of any state that is headquarters to an interstate bank which has branches in the covered state. Therefore, since Arkansas has branches of banks based in Alabama , Georgia , Mississippi , Missouri , North Carolina , Ohio , and Texas , any loan that

8944-514: The same basic usury limit, though unlike Arkansas their legislatures can (and generally do) set different limits. If Section 731 applies to those states, then all their usury limits are inapplicable to banks based in those states, since Wells Fargo has branches in both states. The act is often cited as a cause of the 2007 subprime mortgage financial crisis "even by some of its onetime supporters." Former President Barack Obama has stated that GLBA led to deregulation that, among other things, allowed for

9048-429: The scale some had expected. Retail banks, for example, do not tend to buy insurance underwriters, as they seek to engage in a more profitable business of insurance brokerage by selling products of other insurance companies. Other retail banks were slow to market investments and insurance products and package those products in a convincing way. Brokerage companies had a hard time getting into banking, because they do not have

9152-491: The site for its stables. The company's first New York headquarters was an 1858 marble Italianate palazzo at 55–61 Hudson Street , which had a busy freight depot on the ground story with a spur line from the Hudson River Railroad . A stable was constructed in 1867, five blocks north at 4–8 Hubert Street. The company prospered sufficiently that headquarters were moved in 1874 from the wholesale shipping district to

9256-497: The spin-off of the remaining investment banking and institutional businesses as Lehman Brothers , ending its foray into the brokerage business. In September 1994, the Optima True Grace card was introduced. The card was unique in that it offered a grace period on all purchases whether a balance was carried on the card or not, not charging interest on new purchases immediately for cards with unpaid balances. The card

9360-403: The successor earlier in 1850 of Butterfield, Wasson & Company). Wells and Fargo also started Wells Fargo & Co. in 1852 when Butterfield and other directors objected to the proposal that American Express extend its operations to California. American Express initially established its headquarters in a building at the intersection of Jay Street and Hudson Street in what was later called

9464-559: The time of its acquisition, Shearson Loeb Rhoades was the second-largest brokerage firm , behind Merrill Lynch . After the purchase of Shearson, Weill was given the position of president of American Express in 1983. Weill grew increasingly unhappy with responsibilities within the company and his conflicts with CEO James D. Robinson III . Weill soon realized that he was not positioned to be named CEO and resigned in August 1985. In 1984, American Express acquired Lehman Brothers and added it to

9568-431: The time. The building completed the continuous masonry wall of its block-front and assisted in transforming Broadway into the "canyon" of neo-classical masonry office towers familiar to this day. American Express sold this building in 1975, but retained travel services there. The building was also the headquarters over the years of other prominent firms, including investment bankers J.& W. Seligman & Co . (1940–74),

9672-529: The use of Visa and Mastercard. The rationale was due to far lower fees as compared to American Express' fees at the time (which were about 4% for each transaction versus around 1.2% for Visa and Mastercard). The revolt, known as the "Boston Fee Party" (alluding to the Boston Tea Party ), spread to over 250 restaurants across the United States, including restaurants in other cities such as New York City , Chicago , and Los Angeles . Visa offered to pay

9776-426: The very financial assets claimed to be the cause of the mortgage crisis, and were also already able to keep their books as they had. He concluded that greater access to investment capital as many investment banks went public on the market explains the shift in their holdings to trading portfolios. Calabria noted that after GLBA passed, most investment banks did not merge with depository commercial banks, and that in fact,

9880-611: Was an issue of hot contention, and the Clinton Administration stressed that it "would veto any legislation that would scale back minority-lending requirements." GLBA also did not remove the restrictions on banks placed by the Bank Holding Company Act of 1956 which prevented financial institutions from owning non-financial corporations. It conversely prohibits corporations outside of the banking or finance industry from entering retail and/or commercial banking. Many assume Wal-Mart 's desire to convert its industrial bank to

9984-399: Was assigned the task of consolidating the railway lines for the war effort. All contracts between express companies and railroads were nullified and McAdoo proposed that all existing express companies be consolidated into a single company to serve the country's needs. This ended American Express's express business and removed them from the ICC's interest. The result was that a new company called

10088-606: Was based on an assumption that they would be able to force a change in the law. The Gramm–Leach–Bliley Act passed in November 1999, repealing portions of the BHCA and the Glass–Steagall Act, allowing banks, brokerages, and insurance companies to merge, thus making the CitiCorp/Travelers Group merger legal. Also prior to the passage of the Act, there were many relaxations to the Glass–Steagall Act . For example,

10192-560: Was conveyed to commercial banks and everyone got involved in the high-risk gambling mentality". In an article in The Nation , Mark Sumner asserted that the Gramm–Leach–Bliley Act was responsible for the creation of entities that took on more risk due to their being considered " too big to fail ". According to a 2009 policy report from the Cato Institute authored by one of the institute's directors, Mark A. Calabria , critics of

10296-554: Was discontinued a few years later. In 1998, Amex launched the Blue credit card, targeted at young adults, in the UK after testing it in other countries. The card had a smart chip and users were encouraged to pay bills and get information via the company website. It launched in the US in 1999. A television media campaign for Blue adopted the 1979 UK Synthpop hit " Cars " by Gary Numan as its theme music. In 1999, American Express introduced

10400-603: Was instrumental in expanding business operations overseas, even investing in tourist relations with the Soviet Union . During World War I, Dawson was a photographer and film correspondent with the German army. American Express was one of the monopolies that President Theodore Roosevelt had the Interstate Commerce Commission (ICC) investigate during his administration (1901–1909). The interest of

10504-516: Was introduced in 1975 and renewed in 2005. In the 1980s, Amex acquired and then divested a stake in Shearson . In the 1990s, it stopped reducing interchange fees for merchants who exclusively accepted Amex cards and expanded market share through targeted marketing campaigns. Amex converted to a bank holding company during the 2007–2008 financial crisis . Amex began operating airport lounges in 2013, offering access to certain cardholders. Amex had

10608-475: Was merged with the investment banking business. The investment banking arm was renamed Shearson Lehman Hutton, Inc. In 1983, as part of Robinson's plan to expand into international banking of wealthy clients, Amex acquired Trade Development Bank of Geneva from Edmond Safra for US$ 550 million and Safra became a member of the board of directors of Amex. TDB executives were excluded from important company decisions and Safra unsuccessfully tried to repurchase

10712-564: Was offered by invitation only to American Express customers with at least two years of tenure, significant spending, and excellent payment history. In 1987, American Express introduced the Optima card, its first credit card product that did not have to be paid in full at the end of the month. In 1991, a group of restaurants in Boston , including some that were exclusive to Amex, stopped accepting American Express while accepting and encouraging

10816-408: Was passed by the Senate 90–8, and by the House 362–57. The legislation was signed into law by President Bill Clinton on November 12, 1999. Many of the largest banks, brokerages, and insurance companies desired the Act at the time. The justification was that individuals usually put more money into investments when the economy is doing well, but they put most of their money into savings accounts when

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