WASHINGTON — The Federal Reserve has granted the request of credit card giant American Express to become a bank holding company.

The Fed announced late Monday that it had approved the application for American Express and a related company, American Express Travel Related Services, to become bank holding companies.

The surprise announcement would give American Express access to low-cost financing from the Federal Reserve.

The approval represented the latest reshaping of the financial services industry, which is undergoing its worst credit crisis in decades.

In announcing the action, the Fed cited "emergency conditions." AmEx filed its application with the Fed on Nov. 5.

The Fed's approval for American Express was similar to the decision it made in September to transform the country's two biggest investment banks, Goldman Sachs Group and Morgan Stanley, into bank holding companies.

That move bolstered the two institutions after the collapse of Lehman Brothers, which became the largest bankruptcy filing in U.S. history. The investment banks' troubles stemmed from bad bets on the housing market.

In the case of AmEx, with more consumers having trouble paying their bills, it's seen the value of its primary assets decline. That's made it harder for the company to borrow to pay for daily operations. The company revealed severe financial troubles late last month, when it laid off about 7,000 people.

The transformation of AmEx into a commercial bank opens it up to "an infusion of funds," said Red Gillen, a credit card analyst with research and consulting firm Celent LLC.

"You can't let AmEx fail, is basically what the Fed is deciding."