American Express on Tuesday says they have reached a settlement with the Office of Thrift Supervision and the Federal Deposit Insurance Corporation. Those two agencies were upset with American Express regarding the company’s stance on convenience checks.

Numerous consumers reported that they were sent convenience checks but that the checks were ultimately declined. American Express says the checks were declined due to changes in the consumers’ credit limits or ratings.

In the settlement with the OTS and the FDIC, American Express has agreed to cover the fees caused by the declined checks in addition to the civil penalty. All told, the bill for American Express could be as much as $4 million.

In addition, American Express has agreed to contact bad check registries and credit reporting agencies to clear the name of those who saw their checks bounce due to their convenience check program.

American Express (Image: Flickr)

For the fourth straight day, the stock market finished the day in the positive. However, compared to the previous three days, Tuesday’s gains were minimal.

While strong news from the national housing industry helped some stocks, a number of financial institutions saw their stock prices drop substantially. For example, Goldman Sachs fell $1.20, American Express dropped nearly $1.30 and JP Morgan was down by more than $1.60.

Tuesday wasn't a great day for American Express (Image: Flickr)

Overall, the stock indexes showed that the market moved in the right direction. The Dow Jones industrial average was up 0.2% to finish Tuesday at 8.740.9. The S&P’s 500 was also up 0.2%, while the Nasdaq index was up 0.4%. The major index with the biggest gain was the Russell 2000, which was up a full percentage point.

If the stock market can continue rising, all of the Dow Jones’ losses in 2009 will soon be recovered. As it is, the Dow Jones is down less than 40 points in 2009 after the last three months of gains.

In an effort to save money for the rest of the 2009, American Express will cut approximately 4,000 jobs. Prior to the job cuts, the company was said to have a global workforce of more than 65,000 employees.

In addition to cutting jobs, American Express will also institute a freeze on raises and new hirings. When all is said and done American Express hopes to save about $800 million before the start of 2010.

“We believe these efforts will put us in a better position to remain profitable,” said American Express CEO Kenneth I. Chenault, “and free up some additional resources that will be reinvested in the business to make sure we can take competitive advantage of opportunities as the economy begins to rebound.”

While American Express has been able to avoid disaster in this national economic downturn, many industry experts believed the company needed to do more to cut costs. This latest move will probably be seen as a good move.

American Express Layoffs (Image: Flickr)

If you’ve seen Spinal Tap, you’ll appreciate the humor of this [not humorous] American Express commercial. In this commercial for small business financing, Amex uses “Gimme Some Money” from the 1984 Christopher Guest mockumentary, This is Spinal Tap. But the song was created for the parody film about a make believe rock band. It’s about a guy asking his girlfriend for money.

It makes me wonder if there’s not some guy in the back cube of an advertising company doing the big *wink*. Or was it intentional?

If you haven’t seen Spinal Tap, I’ve included the original clip here after the commercial.

And the original…

Image Credit: AMagill, Flickr

Video Credits: johnmckittrick2 and TruM3t4l

Many experts around the stock market world are talking about how American Express could see its stock value rise throughout the rest of 2009. Currently, American Express stock is just under $19. Not long ago, the stock was sitting at higher than $50.

American Express Logo (Image: Flickr)

American Express took a hit when practically every other company in the financial industry saw their stock prices plummet. However, now experts are pointing to the fact that American Express requires its customers to pay off the card each month, which means that the credit risks associated with the company are much less. Additionally, unlike most credit card companies, American Express relies on transaction fees rather than interest fees.

This past week, Wells Fargo showed a surprisingly high profit. If American Express shows that their books are healthy, their stock could be a hot commodity in upcoming weeks. That said, not all their news is good. American Express has seen a higher than average number of charge-offs and delinquencies in recent months, which could definitely cut into its profits.

One of the more interesting things that people are finding out as credit card issuers start closing accounts of those who are responsible with their credit is that issuers don’t actually want you to pay off your balance every month and use your card only occasionally. I was asked about this recently:

“I don’t understand why credit card companies care,” a friend said. “Don’t they get money on each transaction? Even if I pay off my credit card every month, or use it only occasionally, aren’t they making money even if I don’t pay interest?”

My friend has been caught in the common misconception that the company whose logo you see issues the card. While this is true of American Express and most Discover cards, the fact of the matter is that Visa and MasterCard are actually processing payments, not issuing credit cards. The card issuer — the bank or the credit union that set up your credit card account — earns money from the interest.

Payment processing fees

That 3% to 5% of the transaction that stores and other talk about when they say that part of your purchase is deducted actually goes to the payment processor. Visa and MasterCard have agreed to let certain issuers use their logos, and credit cards can easily be used around the world. But Visa and MasterCard do not get interest from your payments; they make money on the transaction fees they take for facilitating the transaction.

The only way for the actual issuers to make money, then, is to charge interest and fees. If you are not carrying a balance, the bank or credit union doesn’t make money off the loan it provides you. Discover and American Express are exceptions, because they have their own payment processing systems and issue their own credit cards.

I love small business owners! Despite the awful economic news of the last few months, and the beating they took over the worst holiday season in many years, they believe the economy has bottomed out and is on the way up.

The source of this news? An American Express OPEN-sponsored poll of small business owners. Here are the changes in attitude by small business owners that they found from last August and October to January:

The negative trends seem to be reversing in several key areas:
Fewer businesses have been affected by the tightening of credit (50% in August 08, 63% in October 08 and 56% in January 09)

Fewer businesses are accepting lower profit margins (56% in August 08, 58% in October 08 and 46% in January 09)

Fewer business owners are stressed out over the state of the economy (55% in February 08, 71% in August 08 and 66% in January 09)ss

But some of the negatives remain:
It is taking longer for small business owners to get paid (27% in February 08 versus 36% in January 09), and Small business owners are more averse to risk now than they were twelve to 18 months ago (75% indicated this was true)

And,
Two-thirds of small business owners (68%) agree with the statement, “The independence and control I was seeking when I started my own business is threatened by economic forces out of my control”

Small business owners remain optimistic and want to stay the course:
Four in five small business owners agree with the statement, “Even in these turbulent economic times, the rewards and opportunities of running my own business outweigh the risks and challenges”

See why I love small business owners? They are literally the backbone of our economic progress.

Image source: StockXpert

Job Fairs can lead to great job opportunities if you are ready for the opportunities when they show up. Today, I had the privilege to meet some wonderful people at a National Career Fair in Timonium, MD. For three hours I shook hands, reviewed resumes, coached and connected with job seekers. For me as a coach and blogger it was fun. I enjoy meeting people and sharing valuable information that will make the difference between whether someone will get a job in the next 30 to 90 days.

Some of my observations from my power-packed day:

1. Preparation - Many job seekers are not prepared to speak to a hiring manager. Everyone that I met at the job fair had a resume in hand and they came looking for a potential job opportunity. But readiness to truly make a great impression - was none existent for some. I am not a proponent of the elevator speech. I absolutely hate them if you want to know the truth, however the value of them is you have something prepared to say to a potential hiring manager or recruiter that gives them some relative idea about who you are and what you are looking for.

2. Career Path/Industry - I was shocked at the number of people that came to the job fair with only a hope and a prayer to get a job. No clear direction about what they really wanted to do. They just need a job. I understand that in this economy, that is VERY important - having a job! However, if you have no idea about what type of job you are looking for, you end up wasting valuable time. Yours and the potential hiring managers.

3. Resumes - Oh my goodness! I saw every variation and some I had never seen before. I saw one resume that was phenomenal. It had lots of great information on it! It looked good, however the print was too small and there were too many words on the resume. It was comprehensive and there is no doubt about the skills and abilities of the candidate. However it was like looking at an interview on paper. It was too much!

There are so many more things I could share, however let me speak on these three points as I close this post - First, I got one of my best job opportunity at a job fair. I was frustrated at the time in my current job at that time. I really wanted to make a change, and I wanted a specific type of job. Most of the companies at the job fair were not offering jobs that even came close to my dream job. I almost left out of shear frustration. But I got in one more line. It was the American Express table. The line was insanely long to speak to the recruiters manning the booth. But I hung in there. When I finally reached “Michelle”, I was ready for the perfunctory glance at my resume and the inevitable dismissal, on to the next job seeker in line behind me. But that is not what happened. It turns out that Michelle was actually looking for a training manager. It was not one of the jobs they were attempting to fill at the job fair. But she knew about it and we began to discuss my qualifications. I got an interview from the recruiter on the spot and she loved me. Eventually I got the job, and Michelle and I became friends. But there are three reasons I got past the job fair and into the hiring managers office.

The first reason was my level of preparation. I invested a lot of time preparing myself to talk to anyone, at any time about my strong facilitation skills, strong leadership skills, and my desire to run a large training department. When Michelle saw my resume, she probed with a few basic questions, but I saw the opportunity and stepped in ready to “bend her ear” about “Darlene McDaniel”. I knew I wanted to be in Training and Development and I could articulate my career path very easily. My resume was constructed to align with my conversation with Michelle - Training and Development. Training, leadership, people management, and my accomplishments were all over my resume and cover letter. My three points above, preparation, career path and industry and resume, are critical components for working a job fair. Talk to everyone, but if you are prepared and you know what you are looking for, you will be ready when the right opportunity presents itself to you and you will get an open door that may lead to the next job opportunity you are looking for.

Image Credit: Wikipedia Commons