American Express applies for federal aid

WASHINGTON, Nov. 12 (UPI) -- U.S. credit card giant American Express is seeking $3.5 billion from the $700 billion bailout program, sources said.

The company was granted permission by the U.S. Federal Reserve to change its status to a bank holding company Monday, but it was unclear if it asked for federal assistance before or after the changed status was authorized, The Wall Street Journal reported Wednesday.

The funding application is indicative of the spreading crisis among companies of various sectors seeking government assistance. The bailout plan, originally designed for financial firms, now includes the country's largest insurance company, American International Group, among its participants. House Speaker Nancy Pelosi has asked that automobile makers also be cut into the program.

To date, 52 financial institutions have at least preliminary approval for $172 billion in federal funds. An additional 23 have applied for a total of $4.6 billion, New York firm Keefe, Bruyette & Woods said.

American Express is struggling as consumer spending has declined and loan defaults have escalated. The company has not announced its application for funds, nor said what it would do with the capital, the Journal said.