12/15/2008 05:12 am ET Updated May 25, 2011

Diving For Dollars and The Discount Window

The powerhouse credit card company American Express has just joined the storied list of financial firms converting to bank holding companies. Like Merrill Lynch and Salomon Brothers, American Express is seeking shelter from the subprime storm by converting to the highly regulated Bank Holding Company form. In another economic climate, these voluntary conversions from the largely unregulated corporate forms that shape credit card companies and the minimally regulated and often wild, risk seeking investment bank culture would be inexplicable.

Today, the reason for the conversions are obvious, its all about the Benjamins. Yes, access to large amounts of cold cash from customer deposits, and low-cost borrowing at the discount window offered by the Federal Reserve can turn even firms that have an allergy to government regulation into believers in the benefits of regulatory oversight.

How should taxpayers and bank customers view this growing trend of corporate category-hopping? The irony of this flight to regulation is not lost on us consumers who have weathered the voracious appetite of credit card companies to solicit our business and then treat us like red headed step-children, with sharply escalating teaser rates, universal default rules, industry opposition to bankruptcy protection for consumers choking on a suffocating pile of huge interest costs from high interest rates that never seem to go down with other interest rates. Add to this the confusing minimum payment rules and a foul brew of penalty fees that pile up for the unwary to create balances that balloon far beyond the amount of the original debt.

There is a word for what I am feeling about American Express' flight to regulation: Schadenfreund, or comeuppance. The stress and worry that the highly-compensated executives of American Express, Morgan Stanley and Merrill Lynch are experiencing in this crisis can't be half as intense as the customers of these financial giants who were trammeled by high interest rates, risky investment strategies and huge compensation packages for executives who cooked up the products that caused us all so much financial pain. Like my mother used to say: "what goes around, comes around."