Everybody is looking to save their collective butts with hand outs from the government.

American Express (AXP 23.98) is now licensed as a bank holding company and will be regulated by the Federal Reserve.  The company grew into its own by issuing credit cards to well-heeled customers, but strains in the economy and broader financial system led to write-downs and increased loss provisions.

Status as a bank holding company does not mean American Express will change its focus away from the payments industry.

Operating as a bank holding company provides American Express stability and flexibility in the current environment, while expanding its deposit-taking capabilities — a relatively inexpensive source of funds.  The newly granted status also enables American Express to issue debt backed by government guarantee.  Additionally, American Express now has access to Treasury’s Troubled Asset Relief Program (TARP), which will allow the company to put up dodgy assets in exchange for fresh capital.

Access to such resources helps solidify the firm’s balance sheet and mitigate against losses.  For the third quarter, American Express reported increased net loan write-offs, increased loss provisions, and intentions to restrain loan growth.

People, please wake up!