The Independent Bankers Association of America has rejected an overture by American Express Co. for support of an antitrust probe of Visa U.S.A. and MasterCard International.

Writing in a March 28 letter, IBAA executive vice president Kenneth A. Guenther said American Express' campaign to offer credit cards through banks could prove disastrous for small institutions.

"American Express' intentions seem clear," Mr. Guenther wrote. "The air waves and media are filled with advertisements for American Express Financial Direct which is clearly designed to attract and cross-sell banklike products nationwide without the need for banks."

American Express spokeswoman Gail Wasserman said Monday that her company is not seeking to hurt community banks. Rather, it wants to offer another service that they can sell their customers. "We simply want banks to have the freedom to offer products from American Express as well as from Visa and MasterCard," she said.

The Justice Department's antitrust division is investigating American Express' claim that Visa and MasterCard illegally prevent members from offering competing cards.

The IBAA wrote to the Justice Department Feb. 25, urging it to drop the probe. This plea provoked American Express chairman Harvey Golub to urge the IBAA to change its view. "American Express can serve many of your members' needs, and we are eager to discuss deals that are profitable for both us and your members," he wrote in a March 19 letter.

Mr. Guenther, however, closed the door on any such deal. He said the IBAA had recently applied for a credit card bank charter to let a subsidiary provide processing and marketing expertise to small banks.

"Through Visa and MasterCard, the new bank can deliver cards accepted worldwide, backed by effective marketing, with the added assurance that their card association has no interest in cross-selling other banking products," he said.

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