With GE Consumer Finance, AmEx Claims Seven Bank Card Issuers

American Express Co. has announced the seventh financial institution to agree to issue AmEx cards since the New York-based travel-and-entertainment giant began courting banks for its network two years ago. GE Consumer Finance, a Stamford, Conn.-based unit of General Electric Co., said it will issue cards on AmEx's network that will be cobranded with Dillard Store Services Inc., a Little Rock, Ark.-based department-store chain for which GE issues private-label cards. The deal resembles one GE struck a year ago with Discover Financial Services Inc. and Wal-Mart Stores Inc., also a GE private-label client, to issue cobranded cards on Discover's network (Digital Transactions News, Jan. 24, 2005). The Dillard's cards are expected to be first of a series of cobranded cards issued by GE on AmEx's network, the card company said. Besides issuing Visa- and MasterCard-branded cards, GE manages private-label portfolios for approximately 300 retailers, for which it issues about 100 million cards. As is typical in the arrangements with AmEx, GE will issue and market the cards and own the portfolio's receivables. The cards will bear AmEx's mark and will be accepted throughout its merchant network. The agreement with GE follows similar deals AmEx has struck in the U.S. with MBNA Corp., Citigroup Inc., Juniper Bank, USAA Federal Savings Bank, Bank of America Corp., and HSBC North America Holdings Inc. It now has issuing arrangements in place with six of the top 20 issuers of Visa and MasterCard products in the U.S. In October 2004, the U.S. Supreme Court refused to hear an appeal from the bank card networks of a lower court decision in 2001 that had struck down a Visa and MasterCard ban on members issuing cards on either the AmEx or Discover networks.