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California's state budget impasse is a near-annual occurrence. And so is American Express Co.'s tradition of sending a memo to the state's corporate travel card managers saying AmEx is willing to suspend interest fees and fines for late payments from state employee travel cardholders, but only temporarily. "American Express puts out a memo like this virtually every year," says Eric Lamoureux, spokesperson for California's Department of General Services. "[AmEx is] not charging interest or penalties because they understand the situation, but they don't want individuals carrying balances from June." Such discussions usually occur quietly and in little-noticed corners of the state's Department of General Services Web portal. But on Saturday, as California state legislators logged their 54th day without a budget for the state's new fiscal year, which began July 1, the Sacramento Bee published passages from a June 12 memo from Doug Browne, an AmEx government services manager to state travel managers. The memo says AmEx would delay late fees and interest on balances incurred in the current fiscal year for most state cardholders while budget wrangling by lawmakers delays reimbursement to individual cardholders. "However, we reserve the right to suspend service should the impasse become protracted," says a passage from the memo. The memo warns that AmEx could suspend and deactivate accounts that included late payments on spending incurred before the old fiscal year ended, on June 30. An AmEx representative declined to comment, saying the issuer does not publicly discuss its corporate contracts. Lamoureux says state employees owed a total $10.4 million on their AmEx corporate cards July. He says he did not know how much of that amount was incurred before June but adds "if there are individuals carrying balances from June, there's probably very few."
