American Express is paying $96 million to credit card customers in Puerto Rico and other U.S. territories for charging higher interest rates and engaging in other discriminatory practices, federal regulators said on Wednesday. The U.S. Consumer Financial Protection Bureau announced that more than 200,000 consumers at two of the company’s banking subsidiaries had been harmed by the practices, which also included stricter credit cutoffs and less debt forgiveness than offered to customers in U.S. states.The CFPB ordered the company to pay an additional $1 million on top of the $95 million and establish new guidelines to ensure the terms of its card offerings were not discriminatory in the future.
Over the least ten years, more than 200,000 consumers were harmed by the discriminatory practices, which included charging higher interest rates, imposing stricter credit cutoffs, and providing less debt forgiveness. American Express has paid approximately $95 million in consumer redress during the course of the Bureau’s review and American Express’ review, and today’s order requires it to pay at least another $1 million to fully compensate harmed consumers.
The American Express Company is a multi-bank holding corporation based in New York and a global provider of credit and charge cards, savings accounts, certificates of deposit, and travel services. American Express Centurion Bank and American Express Bank, FSB are both bank subsidiaries of American Express Company that administer American Express Company’s credit and charge card lines of business. These companies offered 45 credit cards and charge cards, which are similar to credit cards but require the full balance to be paid monthly, in its U.S. states market, including cards such as the American Express Green, Gold, and Platinum. In addition to managing cards offered in the 50 U.S. states, these two companies also manage cards offered in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories, which include Guam, American Samoa, and Northern Mariana Islands.