NEW YORK – American Express Co (NYSE:). has reached settlements with U.S. regulatory authorities over investigations into its past sales practices targeting small business customers. The financial services company has agreed to pay approximately $230 million in total to resolve the issues, which were self-disclosed and date back to activities that ceased in 2021 or earlier.
The agreements, one with the U.S. Department of Justice and another in principle with the Staff of the Board of Governors of the Federal Reserve System, conclude probes into sales strategies that American Express has since abandoned. The company has stated that it has cooperated extensively with the agencies and has taken voluntary steps to rectify the concerns raised. These steps include discontinuing certain products years ago, conducting an internal review, implementing disciplinary actions, making organizational changes, and enhancing policies and compliance training programs.
American Express indicated that the financial impact of the settlements has already been accounted for, with the costs largely reserved for in previous periods. As a result, the settlements are not expected to affect the company’s financial guidance for 2024. The resolution with the Federal Reserve is anticipated to be finalized in the coming weeks.
The payment of $230 million includes credits for certain actions American Express has taken, suggesting that the company’s proactive measures were recognized in the final settlement terms. This resolution allows American Express to move forward without the overhang of these investigations, which centered on sales practices that are no longer in use.
The settlements highlight the importance of regulatory compliance and the financial industry’s ongoing scrutiny by authorities. American Express’s experience underscores the potential consequences of sales practices and the need for robust internal controls and compliance measures.
This news is based on a press release statement and does not include any promotional content or subjective assessment by the company. It provides a factual report of American Express’s settlements with U.S. regulatory authorities and the financial implications for the company.
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