American Express wins Fed approval to become bank

That's right. A bank.

American Express Co. won U.S. Federal Reserve approval to become a commercial bank, gaining access to government funds as credit-card defaults climb with economies slowing around the world.

The Fed waived a 30-day waiting period on the application because of ``the unusual and exigent circumstances affecting the financial markets,'' according to a Fed statement released yesterday in Washington. Chairman Ben S. Bernanke and his colleagues unanimously approved the plan.

With defaults rising in the U.S. along with the unemployment rate, October marked the first month since 1993 that card companies were unable to sell bonds backed by customer payments. New York-based American Express said last month that credit-card holders failed to repay loans in the third quarter at almost twice the rate of a year earlier.

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