As quietly as a whisper, American Express Co. is eliminating a high-profile part of its organization.
By yearend, New York-based American Express will close its office of public responsibility, which has distinguished the company from its competitors and enhanced its corporate image for nearly two decades.
A company spokeswoman said the office is a casualty of the recently announced company-wide layoffs, and part of an overall reengineering effort.
Only one of the three senior executives who ran the office will remain with the company to continue some of the efforts of the operation.
Meredith Layer, who has managed the office of public responsibility since 1980, and Jan Garkey, senior manager for the last six years, are both leaving American Express. Ms. Layer was responsible for forming many alliances with consumer advocates and government agencies at a time when collaboration with corporations was not popular.
About six support positions also were eliminated.
Patricia Failey, a former acting director of the United States Office of Consumer Affairs who joined American Express 10 months ago, retains her title as vice president of public responsibility but is moving to Washington to join the company's government relations office.
Ms. Failey begins her new job on Monday.
Consumer advocates are mourning the loss of what many called a strong ally. The office of public responsibility, which focused on broad consumer education initiatives -- particularly privacy and interest rate issues -- was generous and well funded.
"American Express was always one company you could count on that was committed to consumer affairs," said Ruth Susswein, executive director of Bankcard Holders of America, "and it is obviously rare for a company to put that much money and effort into such [programs]."
Ms. Susswein is not alone in her disappointment.
Gerri Detweiler, a consumer advocate and former head of Bankcard Holders of America, said that she worries about whether American Express would stop funding various projects that are important to consumer advocates.
Ms. Detweiler is also concerned that with the office of public responsibility gone, other card organizations won't feel as much pressure to support consumer education.
About two weeks ago American Express began calling the consumer groups it has worked with in the past to reassure them that the company is still committed to consumer education.
Cautiously hopeful, Ms. Susswein speculated that American Express has been committed to such issues "too long" for the company to abandon its past efforts.
Ms. Failey defends the company's decision by pointing out that American Express is moving her to Washington, so that "we can be closer to consumer activists, to be more involved in the development of programming."
Nevertheless, Ms. Failey has a new job with new responsibilities. She will be focusing primarily on consumer privacy and public policy issues. Also, Ms. Failey will provide in-house consulting on consumer issues to the various American Express business units.
"Formerly, this office offered many broad scaled consumer oriented programs," explained Ms. Failey, "but in the future we won't have generic consumer programming."
For example, American Express may discontinue producing more than 30 different educational brochures geared to various audiences.
While Ms. Failey will still be the consumer advocate liaison for American Express, and she believes that she will be working with a budget similar to that of the office of public responsibility, industry observers view her increased focus on policy issues as a move to step up American Express' lobbying efforts.
Ms. Failey, however, objected to being called a lobbyist.
"American Express is looking very much like Visa and MasterCard," observed Robert B. McKinley, president of RAM Research Corp., a credit card tracking firm in Frederick, Md.
About two years ago, when Sen. Alfonse M. D'Amato, RN.Y., was calling for credit card interest rate caps, MasterCard and Visa established lobbying offices in Washington.
American Express has had a government relations office there for a number of years, headed by Tim Davis, to whom Ms. Failey will report.
The last hurrah of the current office of public responsibility was a video conference held on Wednesday in Ames, Iowa, which downlinked to 718 sites across the country, as well as two military bases in Europe, and reached about 20,000 community leaders and educators.
American Express believes it produced the largest credit education event ever.
The purpose of the conference, co-sponsored by the Cooperative Extension Service, was to show educators examples of model programs that teach responsible use of credit and present various issues involved in the cost and selection of a card product.
One consumer advocate speculated that American Express is scrapping the office of public responsibility because it is a drain on the bottom line and does not serve the best interests of a company that is now rolling out a series of credit card products.
This source, who wanted to remain anonymous, said, "Since the advent of the True Grace card, it is interesting that American Express has chosen not to sink money into educating the public on interest rates.
"Because there isn't a clear enough link showing that educating consumers has a direct effect on the bottom line, there is no more office of public responsibility."
Despite such doubts about its motives and future activities in the area of consumer education, American Express insists that it will remain a strong supporter of such issues.