FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

)
) CONSENT ORDER, ORDER
In the Matter of ) FOR RESTITUTION, AND
) ORDER TO PAY
AMERICAN EXPRESS CENTURION BANK ) CIVIL MONEY PENALTY
SALT LAKE CITY, UTAH )
) FDIC-13-0285b
(INSURED STATE NONMEMBER BANK) ) FDIC-13-0284k
)
)

The Federal Deposit Insurance Corporation (“FDIC”) has jurisdiction over American

Express Centurion Bank (“Bank” or “AECB”) under section 3(q) of the Federal Deposit

Insurance Act (“FDI Act”), 12 U.S.C. § 1813(q).

The FDIC determined that the Bank has engaged in deceptive and unfair acts and

practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission

Act, 15 U.S.C. § 45(a)(1) (“Section 5”), stemming from the marketing, promotion, and sale of

certain add-on products associated with its charge cards and credit cards, including the Account

Protector product, the ID Protect and ID Protect Premium products, and the Lost Wallet

Protector product as marketed or sold to Card Members in Puerto Rico.

The Bank, by and through its duly elected and acting Board of Directors (“Board”), has

executed a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER,

ORDER FOR RESTITUTION, AND ORDER TO PAY CIVIL MONEY PENALTY

(“CONSENT AGREEMENT”), dated December 17, 2013, that is accepted by the FDIC. With

the CONSENT AGREEMENT, the Bank has consented, without admitting or denying any

violations of law or regulation, to the issuance of this CONSENT ORDER, ORDER FOR
RESTITUTION, AND ORDER TO PAY CIVIL MONEY PENALTY (collectively “ORDER”)

by the FDIC.

Having determined that the requirements for issuance of an order under sections 8(b) and

8(i)(2) of the FDI Act, 12 U.S.C. §§ 1818(b) and 1818(i)(2), have been satisfied, the FDIC

hereby issues the following:

I. CONSENT ORDER

DEFINITIONS

1. For purposes of this ORDER, the following definitions shall apply:

(a) “Account Protector” shall mean the Account Protector program, a debt

cancellation credit card add-on product that AECB marketed and sold to

Card Members from 2004 - 2012 that allowed Card Members to request

benefit payments toward their minimum balances following certain life

events, including but not limited to unemployment, disability, and other

events.

(b) “Board” shall mean AECB’s duly elected and acting Board of Directors.

(c) “Card” shall mean any consumer charge card or credit card issued by

AECB.

(d) “Card Member” shall mean any consumer who has applied or applies for,

and received or receives an AECB consumer charge card or credit card.

(e) “Credit Card Add-on Products” or “CCAO Products” shall mean any fee-

based or no-charge products or services AECB markets or offers to Card

Members as an add-on to a Card and that are supplementary to the credit

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 provided by the Card, including but not limited to Account Protector, ID

Protection Products, and Lost Wallet Protector.

(f) “Effective Date” shall mean the date on which this ORDER is issued.

(g) “ID Protection Products” shall mean “ID Protect” and “ID Protect

Premium” that AECB marketed or sold to Card Members from November

2009 until June 2012, and shall include Single Identity – the predecessor

to ID Protect – that provided consumers with reports, updates or

monitoring of information appearing online and information reported to a

credit reporting agency. ID Protect Premium also provided access to a

one-time triple-bureau credit report and triple-bureau credit monitoring.

(h) “Lost Wallet Protector” shall mean the Lost Wallet Protector product

marketed or sold to Card Members since November 2011, and shall

include Credit Card Registry – the predecessor to Lost Wallet Protector

that was marketed or sold to Card Members prior to November 2011–

which provided assistance to Card Members in replacing lost or stolen

credit cards, passports, mobile phones and in making emergency

notifications.

(i) “Lost Wallet PR” shall mean the Lost Wallet Protector product AECB

marketed or sold to Card Members in Puerto Rico until September 2012.

(j) “Regional Director” shall mean the FDIC Regional Director for the San

Francisco Region.

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 FINDINGS OF FACT

The FDIC finds the following:

2. AECB is a federally insured state nonmember bank chartered by the State of

Utah.

3. With respect to the marketing of Account Protector, ID Protection Products, and

Lost Wallet PR, the Bank’s compliance monitoring, service provider management, and quality

assurance resulted in ineffective oversight, which failed to prevent, identify, or correct certain

improper sales practices.

Account Protector

4. AECB marketed Account Protector as a means for a Card Member to pay the

minimum payment due on the Card Member’s account following certain life events.

5. A Card Member enrolled in Account Protector paid a monthly fee of 0.85 percent

of the Card Member’s balance as of the statement closing date.

6. The Account Protector benefit payment amount was the lesser of $500 or 2.5% of

the Card Member’s account balance as of the date of the qualifying event. A given benefit

payment could be less than a Card Member’s minimum monthly payment, requiring the Card

Member to pay any difference between the benefit payment and minimum payment. For a

significant percentage of Card Members enrolled in Account Protector who received benefits, the

benefit payment did not always cover the minimum payment due on the Card Member’s account.

7. A Card Member enrolled in Account Protector who submitted a benefit claim that

was approved received a payment toward the Card Member’s minimum payment due each

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month for the duration of the benefit period. Benefit periods varied based on the nature of the

qualifying event:

(a) Card Members with approved claims for hospitalization or starting college

received the benefit payment for one month;

(b) Card Members with approved claims for marriage, birth or adoption of

children, home purchase, call to active military duty, relocation, loss of

spouse, or divorce received the benefit payment each month for two

months;

(c) Card Members with approved claims for a leave of absence from their

place of employment received the benefit payment each month for up to

three months; and

(d) Card Members with approved claims for involuntary unemployment or

disability received the benefit payment each month for up to 24 months.

8. A Card Member who was unemployed or disabled at the time of enrollment was

not eligible for a benefit payment due to unemployment or disability existing at the time of

enrollment.

9. With respect to Account Protector, the improper outbound telemarketing practices

included, but were not limited to, the following examples:

(a) Representing that the benefit payment amount would cover the Card

Member’s minimum payment due when, in fact, the benefit payment

would be 2.5% of a Card Member’s outstanding balance on the date of the

qualifying event, up to $500 which frequently did not equal the minimum

payment due;

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 (b) Implying that benefits would last up to 24 months when, in fact, only two

of the thirteen qualifying events with a benefit period covered by Account

Protector included benefit periods of 24 months, and the other eleven

qualifying events had benefit periods of only one, two, or three months;

(c) Representing that there would be no fee if the balance in the account was

paid off, without disclosing that the account balance had to be paid off

before the end of the billing cycle, a date that always preceded the

statement due date;

(d) Disclosing on telemarketing calls that there would be no fee for balances

under $100 when, in fact, the fee for Account Protector was 0.85 percent

of the Card Member’s balance;

(e) Failing to disclose near the outset of the call that Account Protector was

optional and not required for the Card Member to activate or use the Card

Member’s account;

(f) Representing that Account Protector would improve or maintain a Card

Member’s credit score; and

(g) Implying that benefits would be immediately available when there was a

claims process that had to be completed before any benefits were paid.

ID Protection Products

10. AECB marketed the ID Protection Products as protection against identity theft for

Card Members. In offering for sale and selling ID Protection Premium, AECB represented that

in exchange for a monthly fee, AECB would provide features that included a service to monitor

Card Members’ credit information.

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 11. The ID Protection Products had a two-step enrollment process. Following

enrollment, an enrolled Card Member was sent a welcome kit that included additional

information concerning the ID Protection Products. Included in the welcome kit was the first

notice that additional information was required to fully-activate credit monitoring and public

records monitoring benefits. Until a Card Member submitted the additional information to

AECB, the Card Member would not receive the full benefit of ID Protection Products.

12. AECB did not inform Card Members during the telemarketing or enrollment

processes that enrollment was a two-step process. AECB billed Card Members the full amount

for ID Protection Products whether or not the Card Member completed the second step.

13. Approximately 85 percent of Card Members who enrolled in the ID Protection

Products did not complete the second step of the two-step process and paid the full product fee

without receiving all of the advertised benefits.

Lost Wallet PR

14. AECB marketed Lost Wallet PR as a tool to assist Card Members in Puerto Rico

with cancelling and replacing lost or stolen credit cards, including non-American Express cards;

providing key and wallet return; suspending mobile phone services; providing emergency

contact services; and providing assistance in replacing passports.

15. Ninety-seven percent of Card Members enrolled in Lost Wallet PR enrolled via

telemarketing calls conducted in Spanish. Customer service representatives used English

telemarketing scripts and translated the scripts into Spanish for the enrollment calls. AECB did

not provide uniform approved Spanish language scripts for these enrollment calls. In addition,

all written materials provided to Card Members by AECB related to Lost Wallet PR were

provided in English.

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 16. As a result of these sales practices, some Card Members likely did not understand

how to access all benefits of the product or how to register additional credit or charge cards held

by the Card Member and other items, such as passports, after enrollment.

17. Only 40 percent of Card Members enrolled in Lost Wallet PR registered any item

beyond the Card Member’s AECB Card, which was automatically registered at the time of

enrollment.

CONCLUSIONS OF LAW

18. The FDIC finds that AECB engaged in violations of Federal consumer financial

laws, including violations of:

(a) Section 5 for deceptive marketing of Account Protector;

(b) Section 5 for unfair marketing practices with respect to ID Protection

Products; and

(c) Section 5 for deceptive marketing practices with respect to Lost Wallet

PR.

IT IS HEREBY ORDERED that the Bank, its institution-affiliated parties (“IAPs”), as

that term is defined in 12 U.S.C. § 1813(u), and its successors and assigns, cease and desist from

engaging in unsafe or unsound banking practices and operating in violation of Section 5 by

engaging in the deceptive and unfair practices described herein.

IT IS FURTHER ORDERED that the Bank, its IAPs, and its successors and assigns, shall

take the following affirmative action:

CORRECT VIOLATIONS OF LAW

19. Within 60 days of the Effective Date, the Bank shall correct all violations of law

as described herein and implement procedures to prevent their recurrence. The Bank’s actions as

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required by this paragraph must be satisfactory to the Regional Director as determined at

subsequent examinations and/or visitations.

20. The Bank, whether acting directly or through third parties, shall cease all unfair

and deceptive acts or practices in connection with the marketing, sales, and administration of

Account Protector, ID Protection Products, or Lost Wallet PR, and ensure compliance with the

guidance set forth in Unfair or Deceptive Acts or Practices by State-Chartered Banks (FIL-26-

2004, issued March 11, 2004). Without limiting the generality of the foregoing

(a) The Bank shall effect and maintain compliance with Section 5; and

(b) The Bank, whether acting directly or through third parties, shall cease and

desist from any marketing or solicitation of Account Protector, ID

Protection Products, or Lost Wallet PR until it has submitted a compliance

plan, specifically designed to eliminate all violations of Section 5 in the

marketing and servicing of these products to the Regional Director for

non-objection (the “Compliance Plan”). This Compliance Plan shall be

designed to comply with all provisions of this ORDER.

Correct Deceptive Marketing of Account Protector

21. The Bank shall take all action necessary to eliminate all deceptive acts and

practices in violation of Section 5 with respect to Account Protector. In addition, the Bank shall

take all necessary steps to effect and maintain future compliance with Section 5 when marketing

or selling Account Protector, as described more particularly herein.

22. The Bank, whether acting directly or through third parties, shall not make, or

allow to be made, any deceptive representations, statements, or omissions, expressly or by

implication, in the marketing materials, telemarketing scripts and/or sales presentations used to

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solicit any Card Member or prospective Card Member to enroll in Account Protector, including

but not limited to misrepresentations as to the following:

(a) Any and all fees, costs, expenses and charges associated with Account

Protector;

(b) That Account Protector is optional and not required for the Card Member

to activate or use his or her Card;

(c) That Account Protector will improve or maintain a Card Member’s credit

score;

(d) That Account Protector will cover a Card Member’s minimum balance;

(e) The timing of and mechanism for calculating a Card Member’s benefit

amount available when the Card Member uses Account Protector;

(f) Payment terms for Account Protector, including the date AECB will use to

calculate any fee incurred for Account Protector;

(g) The length of the benefit period, including that most qualifying events

carry a benefit period of one, two, or three months; and

(h) Any material conditions, benefits and restrictions related to Account

Protector.

Correct Unfair Marketing of ID Protection Products

23. The Bank shall take all action necessary to eliminate all unfair acts and practices

in violation of Section 5 with respect to the ID Protection Products. In addition, the Bank shall

take all necessary steps to effect and maintain future compliance with Section 5 when marketing

or selling the ID Protection Products, as described more particularly herein.

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 24. The Bank, whether acting directly or through third parties, shall disclose to Card

Members during telemarketing solicitations the specific terms and features of the ID Protection

Products.

25. The Bank shall not charge Card Members for the ID Protection Products until the

Card Members complete the steps necessary to receive the full benefits of the products.

Correct Deceptive Marketing of Lost Wallet PR

26. The Bank shall take all action necessary to eliminate all deceptive acts and

practices in violation of Section 5 with respect to Lost Wallet PR. In addition, the Bank shall

take all necessary steps to effect and maintain future compliance with Section 5 when marketing

or selling the Lost Wallet PR, as described more particularly herein.

27. The Bank, whether acting directly or through third parties, shall not make, or

allow to be made, any deceptive representations, statements, or omissions, expressly or by

implication, in the marketing materials, telemarketing scripts and/or sales presentations used to

solicit any Card Member or prospective Card Member to enroll in Lost Wallet PR, including but

not limited to misrepresentations or omissions as to the following:

(a) That Lost Wallet PR is optional and not required for the Card Member to

activate or use his or her Card;

(b) Any steps the Card Member must take following enrollment to obtain Lost

Wallet PR benefits; and

(c) Any material conditions, benefits and restrictions related to Lost Wallet

PR.

Page 11 of 25
 COMPREHENSIVE CREDIT CARD ADD-ON PRODUCT REVIEW

IT IS FURTHER ORDERED that the Bank take additional affirmative actions as follows:

Independent Third Party Review

28. Within 30 days from the Effective Date, the Bank shall submit to the Regional

Director for non-objection the name and qualifications of an independent third party (“Add-On

Review Consultant”) who possesses the appropriate expertise and qualifications to review all

Credit Card Add-on Products offered by the Bank. At a minimum, the Add-on Review

Consultant shall:

(a) Review and assess all CCAO Products, except for Account Protector, ID

Protection Products, and Lost Wallet PR, for compliance with Section 5

and all other applicable Federal consumer financial laws; and

(b) Provide to the Board a detailed written report containing its analysis,

assessments, and recommendations, which the Board shall review within

60 days of receipt. This review shall be recorded and noted in the Board

minutes.

29. Within 30 days from the receipt of non-objection by the Regional Director of the

selection of the Add-On Review Consultant, the Bank shall develop, in consultation with the

Add-On Review Consultant, and submit to the Regional Director for non-objection, a CCAO

Product review schedule that shall include, at a minimum:

(a) A list grouping all CCAO products to be reviewed with a prioritized

review schedule;

(b) The date by which the review will be, or has been, completed for each

CCAO product; and

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 (c) The date that the final written reports will be, or have been, completed for

all CCAO products.

30. The Bank shall, within 15 days of the Board’s review of the Add-On Review

Consultant’s report, provide the Regional Director with a copy of the report.

31. If any report provided by the Add-On Review Consultant identifies any issues

regarding compliance with Section 5, or any other applicable Federal consumer financial law, the

Bank shall:

(a) Within 120 days of receiving the Add-On Review Consultant’s report,

submit a remediation plan to the Regional Director for non-objection prior

to implementation; and

(b) Within 120 days of receiving the Add-On Review Consultant’s report,

submit to the Regional Director for non-objection an implementation plan

for corrective measures to address any issues contained in the Add-On

Review Consultant’s report utilizing the Compliance Program and CMS

established in accordance with the October 1, 2012, Joint Consent Order

issued by the FDIC and CFPB, In the Matter of AMERICAN EXPRESS

CENTURION BANK, SALT LAKE CITY, UTAH, Docket Numbers

FDIC-12-315b, FDIC-12-216k, and 2012-CFPB-0002 (Oct. 1, 2012)

(“October 2012 Consent Order”).

32. The Bank shall develop and implement a record-keeping system and internal audit

procedures that are reasonably designed to allow the FDIC to:

(a) Review and monitor the Bank’s practices relating to the CCAO Products;

and

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 (b) Confirm that the Bank is in compliance with this ORDER and all

applicable Federal consumer financial laws, including Section 5.

II. ORDER FOR RESTITUTION

PAYMENT FLOOR

33. Pursuant to the ORDER, the Bank shall provide restitution in an amount not less

than $40,900,000, less any restitution made by the Bank prior to the Effective Date of this

ORDER that complies with the requirements of this ORDER (“Payment Floor”), for the purpose

of providing restitution as required by this Section. If AECB claims to have made any restitution

prior to the Effective Date of this ORDER that complies with the requirements of this ORDER,

the Bank shall provide appropriate proof of such restitution to the Regional Director within 30

days of the Effective Date.

34. The Bank shall make all restitution required by the ORDER, regardless of

whether the total of such restitution exceeds the Payment Floor.

35. If the Bank has provided restitution to a Card Member pursuant to the order

issued on December 24, 2013, by the Consumer Financial Protection Bureau, then this ORDER

shall not be construed as requiring the Bank to provide duplicate restitution to that Card Member.

The Bank shall provide appropriate proof of such restitution to the Regional Director.

RESTITUTION PLAN FOR ELIGIBLE CONSUMERS

36. For purposes of this restitution, the following definitions shall apply:

(a) Account Protector Eligible Consumers are defined as all Card Members who were

subject to the deceptive pricing claims and who did not receive the benefit of the

product as the Bank marketed it. Account Protector Eligible Consumers fall into

one or more of three groups:

Page 14 of 25
 1. Card Members who bought Account Protector through inbound or

outbound telemarketing (“Telemarketing Account Protector

Eligible Consumers”);

2. Card Members who received a benefit payment that was not

sufficient to meet the minimum payment due in the billing cycle in

which the payment was received, regardless of the sales channel

(“Min Due Account Protector Eligible Consumers”); and

3. Card Members who were denied certain benefits because the Card

Member’s life event experienced while enrolled in Account

Protector began prior to enrollment (“Denied Account Protector

Eligible Consumers”).

(b) ID Protection Eligible Consumers are defined as all Card Members who

purchased ID Protect and ID Protect Premium.

(c) Lost Wallet PR Eligible Consumers are defined as all Puerto Rico Card Members

who purchased Lost Wallet PR via telemarketing from July 2000 until September

2012, and did not register any item beyond the Card with which the Card Member

enrolled.

37. Eligible Consumers are defined as all Account Protector Eligible Consumers, ID

Protection Eligible Consumers and Lost Wallet PR Eligible Consumers. Within 90 days after the

Effective Date, the Bank shall submit a Restitution Plan (the “Restitution Plan”), including

samples of letters or other communications sent or to be sent to consumers, to the Regional

Director for non-objection.

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 38. With respect to Account Protector Eligible Consumers, the Restitution Plan shall,

at a minimum, require the Bank to:

(a) Refund program fees to Telemarketing Account Protector Eligible

Consumers as follows:

1. for those Telemarketing Account Protector Eligible Consumers

who were enrolled in Account Protector for less than twelve

months, a full refund of all program fees plus at least 1.3%

interest calculated from the date the fees were charged until the

date of reimbursement, less any benefit payment the Card

Member received during that enrollment; and

2. for Telemarketing Account Protector Eligible Consumers who

were enrolled in Account Protector for twelve months or more,

restitution equivalent to twelve months of the Card Member’s

average program fees plus at least 1.3% interest calculated

from the date the fees were charged until the date of

reimbursement, less any benefit payment the Card Member

received during that enrollment.

(b) Provide restitution to Min Due Account Protector Eligible Consumers.

The restitution shall be the difference between the benefit payment the

Card Member received and an amount equal to at least the minimum

payment due, any applicable finance charges, late fees, and over-limit fees

plus at least 1.3% interest calculated from the date the finance charges and

fees were charged until the date of reimbursement. Restitution shall

Page 16 of 25
 include removing any penalty APR triggered as the result of the benefit

payment being insufficient to meet the minimum payment due.

(c) Provide restitution to Denied Account Protector Eligible Consumers. The

restitution shall be the benefit payment amount the Card Member would

have received (or the minimum due each relevant billing cycle, if greater),

had the Card Member’s benefit request not been denied, for the maximum

benefit period for each event, including any applicable finance charges,

late fees, and over-limit fees plus at least 1.3% interest calculated from the

date the finance charges and fees were charged until the date of

reimbursement. Restitution shall include removing any penalty APR

triggered as the result of the benefit payment being insufficient to meet the

minimum payment due.

39. With respect to ID Protection Eligible Consumers, the Restitution Plan shall, at a

minimum, require the Bank to provide full restitution of fees, including any applicable finance

charges and over-limit fees, plus at least 1.3% interest calculated from the date fees were charged

until the date of reimbursement.

40. With respect to Lost Wallet PR Eligible Consumers, the Restitution Plan shall, at

a minimum, require the Bank to provide full restitution of fees, including any applicable finance

charges and over-limit fees, plus at least 1.3% interest calculated from the date fees were charged

until the date of reimbursement.

41. The Restitution Plan shall provide for processes covering all Eligible Consumers

regardless of their current account status with the Bank, including open accounts, closed

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accounts with and without a balance, and charged-off accounts. The process shall include the

following requirements:

(a) for any open credit card account (including inactive accounts), the Bank

shall deliver a statement credit to the account and/or otherwise send a

check;

(b) for any closed credit card account, the Bank shall decrease the account

balance (if any) by the amount of the redress, and where the redress is

greater than the existing account balance, mail to the Eligible Consumer a

check in the amount of the excess;

(c) for any charged-off account, the Bank shall decrease the charged-off

balance by the amount of redress, and where the refund is greater than the

existing charged-off balance, the Bank shall mail to the Eligible Consumer

a check in the amount of the excess;

(d) if the account holder is deceased, and the balance is greater than the

refund, the Bank shall provide a statement credit to the account, and

otherwise a refund check for the remaining refund shall be sent in

accordance with applicable law; and

(e) with respect to any bankruptcy, estate, accounts in litigation and sold

charged-off accounts, the Bank shall make the refund in accordance with

applicable law.

42. Within 180 days of receipt of non-objection from the Regional Director, the Bank

shall implement the Restitution Plan. Restitution provided by the Bank shall not limit

consumers’ rights in any way.

Page 18 of 25
 43. The Bank shall retain for seven years all records pertaining to the Restitution

Plan, including but not limited to: documentation of the processes and procedures used to

determine the Eligible Consumers; the names, contact, and account information of the Eligible

Consumers; any mailing records; and documentation that the appropriate restitution and

equitable relief were made.

REVIEW OF RESTITUTION PLAN

44. Prior to submission to the Regional Director, the Restitution Plan shall be

reviewed by the Compliance Program Consultant retained pursuant to paragraph 24 of the

October 2012 Consent Order or another independent third party capable of conducting this

review that is acceptable to the Regional Director.

MAILING REFUNDS

45. Within 90 days from the Effective Date, the Bank shall submit to the Regional

Director for review a plan for mailing refunds, including the proposed text of letters that have

been sent or shall be sent to Eligible Consumers regarding restitution checks or account credits.

For letters sent on or after the Effective Date of the ORDER, the letters shall include satisfactory

language explaining the reason the Bank is sending a restitution check or crediting an account,

including that the Bank is sending the check or crediting an account as the result of an

enforcement action by the FDIC. Any letters or other communications sent after the Effective

Date of this ORDER shall also include reference to and the web address for any FDIC press

releases related to the ORDER. The Bank shall then address any comments of the Regional

Director, making such changes as may be required to the proposed letters. The letters,

incorporating any changes that may be required in response to comments by the Regional

Page 19 of 25
Director, shall be sent by mail to all Eligible Consumers entitled to receive restitution checks

and/or credits to their accounts in accordance with the ORDER.

46. When the Bank makes cash restitution by check made payable to any consumer

receiving restitution under the ORDER (“Eligible Consumer”), AECB shall send the check by

United States Postal Service first-class mail, address correction service requested, to the Eligible

Consumer’s last address as maintained by the Bank’s records. The Bank shall make reasonable

attempts to obtain a current address for any Eligible Consumer whose notification letter and/or

restitution check is returned for any reason, using standard address search methodologies, and

shall promptly re-mail all returned letters and/or restitution checks to current addresses, if any. If

the check for any eligible consumer is returned to the Bank after such second mailing by the

Bank, or if a current mailing address cannot be identified using standard address search

methodologies, the Bank shall retain the restitution amount of such Eligible Consumer for a

period of three-hundred sixty (360) days from the date the restitution check was originally

mailed, during which period such amount may be claimed by such Eligible Consumer upon

appropriate proof of identity. After such time these monies shall be disposed of in accordance

with the Restitution Plan.

INDEPENDENT CERTIFIED ACCOUNTING FIRM

Engagement of Firm

47. The Bank shall utilize, at its own expense, the services of the independent

certified accounting firm (“Firm”) retained as part of the October 2012 Consent Order, or, within

15 days from after the Regional Director’s non-objection pursuant to Paragraph 48, retain, at its

own expense, a different Firm acceptable to the Regional Director to determine compliance with

the Restitution Plan. The Firm shall determine compliance in accordance with the attestation

Page 20 of 25
standards established by the American Institute of Certified Public Accountants for agreed-upon

procedures for engagements.

48. If the Bank elects to engage a different Firm, prior to engagement, and no later

than 60 days from the Effective Date, the Bank shall submit the name and qualifications of the

Firm, together with the proposed engagement letter with the Firm and the proposed agreed-upon

procedures, to the Regional Director for non-objection. If the Bank intends to utilize the services

of the Firm retained pursuant to the October 2012 Consent Order, no later than 60 days from the

Effective Date, the Bank shall submit notification of that intent, together with the proposed

engagement letter with the Firm and the proposed agreed-upon procedures, to the Regional

Director for non-objection.

49. The engagement letter between the Bank and the Firm shall grant the FDIC access

to the Firm’s staff, work-papers, and materials prepared in the course of the Firm’s engagement

and preparation of the reports required by the ORDER.

50. To be acceptable to the Regional Director, any Firm other than the Firm retained

pursuant to the October 2012 Consent Order must be an objective and unaffiliated third party

and, at a minimum, comply with the Code of Conduct of the appropriate State Board of

Accountancy.

51. Within 15 days after submission of the Firm's name, the Regional Director shall

notify the Bank in writing of the FDIC’s objection or non-objection thereto.

52. The Firm shall submit the Restitution Report called for in paragraph 54 to the

Regional Director for review, comment, and non-objection within 90 days after the Bank

completes implementation of the Restitution Plan.

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 Report on Restitution

53. The Firm shall review and verify that the Bank accurately identified Eligible

Consumers, calculated restitution correctly, and made the appropriate account credits or cash

refunds to Eligible Consumers.

54. The Firm shall prepare a detailed written report of its assessment of the Bank’s

compliance with the Restitution Plan (“Restitution Report”). The Restitution Report shall also

include the following:

(a) The processes and procedures by which the Bank determined the

restitution amounts described in paragraphs 38-40;

(b) The total number of each such class of Eligible Consumers;

(c) The total amount of restitution made to each such class of Eligible

Consumers under the Restitution Plan; and

(d) The total amount of interest paid.

III. ORDER TO PAY CIVIL MONEY PENALTY

55. IT IS FURTHER ORDERED that by reason of the violations of law and

regulations set forth herein, and after taking into account the appropriateness of the penalty with

respect to the size of financial resources and good faith of the Bank, the gravity of the violations,

the history of previous violations by the Bank, and such other matters as justice may require,

pursuant to section 8(i)(2) of the FDI Act, 12 U.S.C. § 1818(i)(2), the Bank shall pay a total civil

money penalty of $ 3,600,000. The Bank shall pay the civil money penalty to the Treasury of

the United States, as directed by the FDIC. The Bank shall pay such civil money penalty itself,

and is prohibited from seeking or accepting indemnification from such payment from any third

party.

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 IV. NOTIFICATION AND REPORTING REQUIREMENTS

PROGRESS REPORTS AND CERTIFICATIONS OF COMPLIANCE

56. Within 30 days from the end of each calendar quarter following the Effective

Date, the Bank shall provide a written progress report addressing each provision of the ORDER

and detailing the form, manner, results and dates of any actions taken to secure compliance with

the provisions of the ORDER to the Regional Director. All progress reports and other written

responses to the ORDER shall be reviewed by the Board and made a part of the Board minutes.

The progress reports shall be true and accurate and accompanied by a certification of compliance

signed by the Chairman of the Board and the Bank President. The certification of compliance

shall include the following:

(a) A statement confirming that the Bank is in compliance with all provisions

of the ORDER; or

(b) If the Bank is not in compliance with all provisions of the ORDER, the

Bank must provide:

(i) A list of the provisions with which the Bank is not yet in

compliance, an explanation of why the Bank is not yet in

compliance with each specific provision, and a description of the

actions the Bank has taken to comply with the provision; and

(ii) A statement as to when the Bank will be in full compliance with

the ORDER.

SHAREHOLDER NOTIFICATION

57. The Bank shall either provide a copy of the ORDER to its shareholder, American

Express Travel Related Services (“AETRS”), or otherwise furnish a description of the ORDER

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in conjunction with the next board of directors meeting of AETRS, in which case such

description shall fully describe the ORDER in all material respects. The description and any

accompanying communication, statement, or notice shall be sent to the FDIC, Disclosure and

Securities Section, 550 17th Street, N.W., Washington, D.C. 20429, for non-objection or

comment prior to dissemination to the Bank’s shareholder. Any changes requested to be made

by the FDIC shall be made prior to dissemination of the description, communication, notice, or

statement. This description shall be disseminated in conjunction with the Bank’s next

shareholder communication and in conjunction with its notice or proxy statement preceding the

Bank’s next shareholder meeting. The terms “next shareholder communication” and “next

shareholder meeting” mean the next shareholder communication and next shareholder meeting

immediately after the FDIC provides the Bank with either non-objection of or comments about

the description.

V. SAVINGS CLAUSE AND EFFECTIVE DATE OF THE ORDER

58. The provisions of the ORDER shall not bar, estop, or otherwise prevent the FDIC

or any other federal or state agency or department from taking any other action against the Bank

or any of the Bank’s current or former institution-affiliated parties, as that term is defined in

section 3(u) of the FDI Act, 12 U.S.C. § 1813(u).

59. The ORDER shall be effective on the date of issuance.

60. Calculation of time limitations for compliance with the terms of the ORDER shall

be based on calendar days, unless otherwise noted.

61. The provisions of the ORDER shall be binding on the Bank, its officers, agents,

servants, employees, institution-affiliated parties, and any successors and assigns thereof.

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The provisions of the ORDER shall remain effective and enforceable except to the extent that

and until such time as any provision has been modified, terminated, suspended, or set aside in

writing by the FDIC.

Issued pursuant to delegated authority this 24th day of December, 2013.

/s/
Sylvia H. Plunkett
Senior Deputy Director
Division of Depositor and Consumer Protection

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