American Express 2009 Annual Report Download - page 67

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2009 FINANCIAL REVIEW
AMERICAN EXPRESS COMPANY
approximately 15 basis points on certain liabilities of banks,
bank holding companies and other financial institutions with
consolidated assets of at least $50 billion; the potential failure
of the U.S. Congress to extend the active financing exception
to Subpart F of the Internal Revenue Code, which could
increase the Company’s effective tax rate and have an adverse
impact on net income; the potential impact of the CARD Act
and regulations adopted by federal bank regulators relating to
certain credit and charge card practices, including, among
others, the imposition by card issuers of interest rate increases
on outstanding balances and the allocation of payments in
respect of outstanding balances with different interest rates,
which could have an adverse impact on the Company’s net
income; accounting changes, including the implementation of
changes to the accounting for off-balance sheet activities or
other potential regulatory interpretations in this area, which,
effective January 1, 2010, requires the Company to
consolidate the assets and liabilities of the lending
securitization trust, thereby requiring the Company to
reestablish loss reserves, which has in turn resulted in a
reduction to the Company’s regulatory capital ratios and will
also result in a change with respect to the presentation of its
financial statements beginning in the first quarter of 2010,
and which also could result in lower credit ratings on
securities issued by the Company’s off-balance sheet
securitization trusts as a result of the uncertainty with respect
to the ability of rating agencies to continue to rely on the
FDIC’s safe harbor rule regarding the isolation of securitized
assets in the event of a sponsoring bank’s receivership or
conservatorship, which in turn could adversely impact the
Company’s ability to utilize securitizations as a component of
its funding strategy; outcomes and costs associated with
litigation and compliance and regulatory matters; and
competitive pressures in all of the Company’s major
businesses. A further description of these and other risks and
uncertainties can be found in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2009, and the
Company’s other reports filed with the SEC.
65