American Express resolution plan clears review amid sale doubts
Federal Reserve and FDIC regulators found no deficiencies in the 2025 resolution plan of American Express Company but directed the firm to reconsider its coordinated sale strategy before its July 2028 submission due to conflicting bankruptcy and receivership rules.
Friction between bankruptcy and receivership
In their joint feedback letter, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) found no shortcomings or deficiencies in the 2025 resolution plan submitted by American Express Company.
However, supervisory feedback highlighted major execution obstacles in the group’s preferred Coordinated Sale Strategy.
Under that plan, American Express National Bank would enter FDIC receivership while the parent holding company and Travel Related Services file for Chapter 11 bankruptcy.
The strategy relies on selling all assets simultaneously to a single buyer, which conflicts with statutory mandates requiring the FDIC to choose the least costly resolution option.
The July 2028 restructuring mandate
Under Dodd-Frank Section 165(d), bank holding companies with $250 billion or more in consolidated assets must submit rapid and orderly resolution blueprints every three years.
American Express must file its next targeted resolution plan by July 1, 2028.
The FDIC and Fed instructed the company to evaluate alternative strategies if these impediments cannot be resolved, including structures that eliminate dependencies between administrative receivership and federal bankruptcy proceedings.
Wishful thinking meets legal reality
The feedback exposes a structural clash between Chapter 11 proceedings and bank receivership rules.
Regulators rightly reject the unrealistic assumption that the FDIC will coordinate asset bidding with bankruptcy courts.
American Express must decouple its operating units or face formal plan deficiencies in 2028.