American Express Settles With CFPB on Discriminatory Card Terms

By Jeff Bater

American Express settled with the Consumer Financial Protection Bureau for at least $96 million to address allegations two bank subsidiaries discriminated against credit card holders in U.S. territories, the regulator announced Aug. 23.

The CFPB accused American Express Centurion Bank and American Express Bank of providing consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories with credit and charge card terms that were inferior to those available elsewhere in the U.S.

American Express has paid about $95 million to consumers during the course of reviews by the CFPB and the company, the regulator said. The CFPB consent order announced Aug. 23 requires the company to pay at least another $1 million to fully compensate harmed consumers.

“Over the course of at least 10 years, more than 200,000 consumers were harmed by American Express’ discriminatory practices, which included charging higher interest rates, imposing stricter credit cutoffs, and providing less debt forgiveness,” the bureau said.

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American Express said it “absolutely does not agree” with the CFPB’s discrimination claims. “Having long since taken actions that the CFPB subsequently ratified, the company decided to settle with them rather than go through years of litigation that would have provided no additional value to any of its customers,” the company said in a statement.

American Express said the discrepancy in card terms was discovered during an internal review that began in 2012. The company said it reported the matter to the CFPB in 2013 and changed the terms and features of cards offered in U.S. overseas territories to match its products elsewhere in the U.S.

The CFPB said its own review concluded that from at least 2005 to 2015, American Express’ Puerto Rico cards “had different — and often worse — pricing, rebates, and promotional offers, underwriting, customer and account management services, and collections practices than its U.S. cards.”

The bureau added that its review “did not find that American Express intentionally discriminated against its customers but rather found that these differences were the result of American Express’ card management structure, which had different business units overseeing its Puerto Rico cards and U.S. cards.”

Richard Cordray, the CFPB’s director, said American Express has ceased the practice and that because of its cooperation in the matter, no civil penalties were assessed.

To contact the reporter on this story: Jeff Bater in Washington at

To contact the editor responsible for this story: Michael Ferullo at

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