Consumer complaint received 2024-02-07
Product: Credit card — General-purpose credit card or charge card
Issue: Trouble using your card — Credit card company won't increase or decrease your credit limit
Company: AMERICAN EXPRESS COMPANY (NJ)

Attn : American Express Company ; Office of the President and Legal Department : To Whom It May Concern, I am in receipt of your correspondence dated XX/XX/XXXX in which you failed to address and properly investigate a complaint against your corporation specifically regarding the mishandling of securities and potential securities fraud. 
On XX/XX/XXXX, You, American Express Company, hereinafter ( " Amex '' ) was issued a financial asset via electronic chattel paper by the Applicant in the form of a credit application XXXX ( consumer credit transaction ), which Amex used, without giving equal or valuable consideration to open and establish an American Express XXXX XXXX XXXX account which as the Authorized Representative/Agent and Beneficiary, with beneficial interest of the Legal Entity/Principal to the account , am entitled to the rights, titles, interest and equity accrued due to the entitlement holder and beneficial/registered owner. Pursuant to American Express Companys Commission File No. XXXX for the fiscal year ended XX/XX/XXXX filed XX/XX/XXXX with the Securities and Exchange Commission ( SEC ) , and per XXXX XXXX XXXX , Amexs current and active Chief Financial Officer, in conjunction with XXXX XXXX XXXX XXXX XXXX XXXX , Amexs Indenture Trustee, collectively, have certified the pledging and conveyance to be held in a Trust, of the accounts receivables/asset backed securities ( commercial/chattel paper ) as collateral to third-party investors as a primary means for Amex to raise capital to which I have not received just compensation, equitable compensation, interest or benefit from despite my involvement. Furthermore, Amex is erroneously reporting deceptive and harmful information, resulting in a defamation of character to the consumer reporting agencies making false claims and allegations of the account being owed, late and past due, to which I can no longer make use of the card/account for any personal, family and household purposes. I would like to inform Amex that the account is federally protected, backed by full faith and credit of the United States and insured up to XXXX USD by the FDIC in the event the account was to ever go into " default. '' Additionally, any contract/agreement of adhesion is biased, unilateral, unethical and unenforceable in the court of law, in the Court of XXXX in Delaware specifically . Moreover, per XXXX XXXX, Adjunct Professor of Finance School of Management at Yale University and XXXX XXXX XXXX, XXXX and Assistant Vice President of the Federal Reserve XXXX XXXX XXXX XXXX, state that U.S. Treasury securities are direct obligations of the U.S. Government issued by the Department of the Treasury. They are backed by the full faith and credit of the U.S. Government and therefore are considered to be free of credit risk. To further confirm incontestable proof and validity, please refer to Title 31 U.S. Code 3123 ( a ) ( b ) ( c ) for verification. Furthermore and for the record, the credit/funds Amex claims they " loaned '' were and always have been credit/funds issued by the Principal/Authorized Representative/Agent via the initial credit application/electronic chattel paper, in the form of a consumer credit transaction for personal, family and household purposes, backed by the Truth In Lending Act ( TILA ). To further establish and confirm the willful and erroneous bad faith business practices by Amex, the following succeeding information is directly extracted from the aforementioned XXXX report Amex filed with the SEC : LONG-TERM DEBT AND ASSET SECURITIZATION PROGRAMS page 66 : As of XX/XX/XXXX, we had {$42.00} XXXX in long-term debt outstanding, including unsecured debt and asset-backed securities. Refer to Note 8 to the Consolidated Financial Statements for a further description of these borrowings and scheduled maturities of long-term debt obligations. We periodically securitize Card Member loans and receivables arising from our U.S. card business, as the securitization market provides us with cost-effective funding. Securitization of Card Member loans and receivables is accomplished through the transfer of those assets to a trust, which in turn issues securities collateralized by the transferred assets to third-party investors. The proceeds from issuance are distributed to us, through our wholly owned subsidiaries, as consideration for the transferred assets. Refer to Note 5 to the Consolidated Financial Statements for a further description of our asset securitizations. 

LIQUIDITY MANAGEMENT page 67 : We seek to maintain access to a diverse set of on-balance sheet and off-balance sheet liquidity sources, including cash and other liquid assets, committed bank credit facilities and secured borrowing facilities. Through our XXXX XXXX subsidiary, AENB, we also hold collateral eligible for use at the Federal Reserves discount window. 

Securitized Borrowing Capacity As of XX/XX/XXXX page 68 : we maintained our committed, revolving, secured borrowing facility, with a maturity date of XX/XX/XXXX, which gives us the right to sell up to {$3.00} XXXX face amount of eligible XXXX notes from the American Express Issuance Trust II ( the Charge Trust ). We also maintained our committed, revolving, secured borrowing facility, with a maturity date of XX/XX/XXXX, which gives us the right to sell up to {$2.00} XXXX face amount of eligible XXXX certificates from the American Express Credit Account Master Trust ( the Lending Trust ). Both facilities are used in the ordinary course of business to fund working capital needs, as well as to further enhance our contingent funding resources. As of XX/XX/XXXX, no amounts were drawn on the Charge Trust facility or the Lending Trust facility. 

Federal Reserve Discount Window : As an insured depository institution, AENB may borrow from the Federal Reserve Bank of XXXX XXXX, subject to the amount of qualifying collateral that it may pledge. The Federal Reserve has indicated that both credit and charge card receivables are a form of qualifying collateral for secured borrowings made through the discount window. Whether specific assets will be considered qualifying collateral and the amount that may be borrowed against the collateral remain at the discretion of the Federal Reserve. 

As of XX/XX/XXXX, we had approximately {$100.00} XXXX in U.S. credit card loans and charge card receivables that could be sold over time through our securitization trusts or pledged in return for secured borrowings to provide further liquidity, subject in each case to applicable market conditions and eligibility criteria. 

GLOSSARY OF SELECTED TERMINOLOGY page 82 : Adjusted net interest income A non-GAAP measure that represents net interest income attributable to our Card Member loans ( which includes, on a GAAP basis, interest that is deemed uncollectible ), excluding the impact of interest expense and interest income not attributable to our Card Member loans. 

Asset securitizations Asset securitization involves the transfer and sale of loans or receivables to a special-purpose entity created for the securitization activity, typically a trust. The trust, in turn, issues securities, commonly referred to as asset-backed securities that are secured by the transferred loans and receivables. The trust uses the proceeds from the sale of such securities to pay the purchase price for the transferred loans or receivables. The securitized loans and receivables of our Lending Trust and Charge Trust ( collectively, the Trusts ) are reported as assets and the securities issued by the Trusts are reported as liabilities on our Consolidated Balance Sheets. 

Continued on page 83 Interest income Includes ( i ) interest on loans, ( ii ) interest and dividends on investment securities and ( iii ) interest income on deposits with banks and other. Interest on loans Assessed using the average daily balance method for Card Member loans. Unless the loan is classified as non-accrual, interest is recognized based upon the principal amount outstanding in accordance with the terms of the applicable account agreement until the outstanding balance is paid or written off. Interest and dividends on investment securities Primarily relates to our performing fixed-income securities. Interest income is recognized using the effective interest method, which adjusts the yield for security premiums and discounts, fees and other payments, so a constant rate of return is recognized on the outstanding balance of the related investment security throughout its term. Amounts are recognized until securities are in default or when it is likely that future interest payments will not be made as scheduled. Interest income on deposits with banks and other Primarily relates to the placement of cash in excess of near-term funding requirements in interest-bearing time deposits, overnight sweep accounts, and other interest-bearing demand and call accounts. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS : NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Page 100 : Interest Income Interest on Card Member loans is assessed using the average daily balance method. Unless the loan is classified as non-accrual, interest is recognized based upon the principal amount outstanding, in accordance with the terms of the applicable account agreement, until the outstanding balance is paid, or written off. Interest and dividends on investment securities primarily relate to our performing fixed-income securities. Interest income is recognized as earned using the effective interest method, which adjusts the yield for security premiums and discounts, fees and other payments, so that a constant rate of return is recognized on the investment securitys outstanding balance. Amounts are recognized until securities are in default or when it becomes likely that future interest payments will not be made as scheduled. Interest on deposits with banks and other is recognized as earned, and primarily relates to the placement of cash, in excess of near-term funding requirements, in interest-bearing time deposits, overnight sweep accounts, and other interest-bearing demand and call accounts. Interest Expense Interest expense includes interest incurred primarily to fund Card Member loans and receivables, general corporate purposes and liquidity needs, and is recognized as incurred. Interest expense is divided principally into two categories : ( i ) deposits, which primarily relates to interest expense on deposits taken from customers and institutions, and ( ii ) debt, which primarily relates to interest expense on our long-term debt and short-term borrowings, as well as the realized impact of derivatives used to hedge interest rate risk on our long-term debt. 

NOTE 5 ASSET SECURITIZATIONS page 117 : We periodically securitize Card Member loans and receivables arising from our card businesses through the transfer of those assets to securitization trusts, American Express Credit Account Master Trust ( the Lending Trust ) and American Express Issuance Trust II ( the Charge Trust and together with the Lending Trust, the Trusts ). The Trusts then issue debt securities collateralized by the transferred assets to third-party investors. The Trusts are considered VIEs as they have insufficient equity at risk to finance their activities, which are to issue debt securities that are collateralized by the underlying Card Member loans and receivables. Refer to Note 1 for further details on the principles of consolidation. We perform the servicing and key decision making for the Trusts, and therefore have the power to direct the activities that most significantly impact the Trusts economic performance, which are the collection of the underlying Card Member loans and receivables. In addition, we hold all of the variable interests in both Trusts, with the exception of the debt securities issued to third-party investors. Our ownership of variable interests in the Lending Trust was {$16.00} XXXX and {$15.00} XXXX as of XX/XX/XXXX and XXXX, respectively, and in the Charge Trust was {$5.00} XXXX and {$3.00} XXXX as of XX/XX/XXXX and XXXX, respectively. These variable interests held by us provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to both the Lending Trust and the Charge Trust. Based on these considerations, we are the primary beneficiary of the Trusts and therefore consolidate the Trusts. The debt securities issued by the Trusts are non-recourse to us. The securitized Card Member loans and receivables held by the Lending Trust and the Charge Trust, respectively, are available only for payment of the debt securities or other obligations issued or arising in the securitization transactions ( refer to Note 2 ). The long-term debt of each Trust is payable only out of collections on their respective underlying securitized assets ( refer to Note 8 ). 

In light of the foregoing, I demand my legal right to the equitable portion of the interest and interest accrued for this account. Please confirm that the Principal will receive their full equitable portion of the interest and interest accrued, now and each and every statement cycle moving forward without any further delay. Please treat this matter with utmost urgency and take immediate action to rectify these bad faith and unwarranted acts by Amex.