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ICP has published a (double) book about the GE Capital-relevant topic of subprime lending - click here for sample chapters, here for a map, here for fast ordering and delivery, and here for other ordering information. The Washington Post of March 15, 2004, calls Predatory Bender: America in the Aughts "the first novel about predatory lending;" the London Times of April 15, 2004, "A Novel Approach," said it "has a cast of colorful characters." The Pittsburgh City Paper of Dec. 11, 2003, says that the "novel Predatory Bender: A Story of Subprime Finance may, in fact, be the first great American lending malfeasance novel... which simultaneously helps us understand why predatory lending goes on, and why there’s hope that it might be curbed." Here's hoping -- including as to GE, in the U.S. and abroad... Click here for Inner City Press' weekday news reports, from the United Nations and elsewhere.
Updated May 5, 2008
Inner City Press / Community on
the Move and the Fair
Finance Watch have become increasingly
concerned with the lack of consumer protections at GE Capital, and at
the lack of human
rights, social and environmental standards at General Electric (GE). GE
Capital is
increasingly entering the field of subprime (ICP contends, predatory)
lending, at
higher-than-normal interest rates in ways that are far from transparent
to consumers, and
without sufficient consumer protection safeguards in place. On
April 25, 2003, ICP /
FFW filed with the Office of Thrift Supervision a 10-page protest to GE
Capital's
application to acquire Conseco's Mill Creek Bank's business, which
includes not only
private label credit cards but also home improvement lending. See
also,
“First International Bank of GE: Facing Up to Reputational Risk,” by
John Engen,
Institutional Investor, November 2004
Outside of the U.S., GE is a major player in subprime finance. On June 16, 2003, ICP filed opposition in Germany to GE Capital's proposal to acquire Allgemeine Privatkundenbank ("Allbank") from Bankgesellschaft Berlin. ICP will continue raising, documenting and seeking action on all of these finance issues, as well as GE's wider impact on communities and also the environment. This ICP GE Watch report will be updated -- stay tuned. Until next time, for or with more information, contact us.
Update
of May 5,
2008: In the Czech Republic, while GE Money Multiservis has not
yet disclosed
its economic results, Cetelem CR granted loans worth Kc2.8bn to clients
in Q1
2008, 18 percent more than a year ago. Cetelem CR operates in the Czech
Republic since 1996, and is one of the 20 subsidiaries of French bank
Cetelem
S.A. Cetelem is a unit of BNP Paribas.
Update
of April 28,
2008: Immelt's been told to try to sell off GE Money. But it's
too late, some
say...
Update
of April 21,
2008: GE Money spokeswoman
Nora
Grase said last week that GE is likely to merge with the recently
acquired
Baltic Trust Bank and operate under brand GE Money Bank, which is
used
also by other banks of the concern. GE
Money communication director in Central and Eastern Europe Jan Hainz
told the
press that the company is interested to develop in Latvia, despite the
instable
economic situation, and GE Money sees a potential for development of
banking
services in Latvia. Hainz said that there are still several countries
in the
Central and Eastern European region in which GE Money is not
represented,
including Estonia and Lithuania, and the company wants to obtain
experience in
Latvia's banking sector to be able to use it later in other countries.
GE Money
launched operations in Latvia's consumer lending market in May 2004 by
purchasing
RD Lizinga Grupa leasing company. In November 2006, GE Money acquired a
98
percent stake in Latvia's Baltic Trust Bank. Baltic Trust Bank ranked
14th
among 24 Latvian banks by assets at the end of February. Watch out for
predatory lending...
Update
of April 7, 2008:
GE Money has bought consulting
company AgroConsult Bohemia, saying it will reinforce consulting
services in
the field of European Union and state budget subsidies. "GE Money
Bank and AgroConsult Bohemia are
important partners to Czech farmers, and the close ties between
consulting and
financing are therefore a completely logical step," AgroConsult Bohemia
director Mojmir Severin said. GE Money Bank provides information to
public
support seekers on the possibilities of financing their projects by
means of
subsidies from EU structural funds and from the state budget. Ah,
specialists
in corporate welfare, say some...
Update
of March 31, 2008: In Australia, "borrowers who want to take Federal Treasurer
Wayne Swan's advice
and move to a new lender face exit fees from their mortgages of up to
$8750.
Swan has advised dissatisfied mortgagors on several occasions to "vote
with their feet" and change to a different bank. Taking that advice may
prove more expensive than staying put. Early exit fees on a standard
variable
rate mortgage now average $1451. The lowest exit fee is $200 and the
highest is
$8750. GE Money charges $8750 for ending a $500,000 mortgage within the
first
12 months."
That is, GE is the most predatory lender in Australia...
Update of March 24, 2008: GE Money announced it has an agreement with tire manufacturer Michelin to provide consumer financing to buy the tires. GE Money will provide the financing through Car-CareOne, a private-label credit program managed by GE Money's sales finance unit. Car owners can choose from 90-day, six month or 12-month no-interest programs for buying Michelin products. Watch out for the balloon payments after that, if GE's other predatory lending is any guide (Michelin guide, in this case)...
Update of March 17, 2008: As exotic consumer loans are discredited in the United States, General Electric takes them overseas. In Singapore, GE Money brags of introducing a loan product called James, "with last installment waiver; pay interest only; payment holiday; step up or step down interest rate," according to Alok Kumar, chief marketing officer at GE Money Singapore. Ah, GE's export of predatory lending...
Update of March 10, 2008: GE Money is in bed with Mattress Firm, a specialty mattress retailer. It was announced on March 3 that the companies have entered into a multi-year agreement to provide consumer financing services. Under the agreement, the Mattress Firm credit card program will be issued through GE Money's Sales Finance unit, and made available through Mattress Firm's 450 stores in 37 markets across the United States...
Update of March 3, 2008: Die Welt reports that GE "aims to take advantage of the financial crisis to acquire businesses, especially financial service providers, in Germany, commenting that some companies will be urgently seeking buyers. Financial services represent one of the main activities of GE, which, in Germany, is active on niche markets through specialized subsidiaries such as Disko Leasing, which provides financing for vehicles and aircraft, among other objects, and GE Money Bank, active in private customer business, which counts 500,000 customers in Germany." So GE helps trigger the subprime crisis, through WMC and otherwise, then seeks to profit on it by buying impacted companies in Germany and elsewhere...
In Russia, GE Money Bank in October-December 2007 put advertisements on the 1st Channel, Russia and STS TV channels, urging to borrow up to 300 thousand rubles at the interest rate starting from 15% annual on their terms. "The minimum interest rate on credits and the indication of a change in the interest rate were announced in the advertisement, while the other conditions determining the value of the credit were given in a small and illegible print at the last second of the commercial. That did not allow the consumer to perceive the information indicated," the regulator FAS says in a statement. According to FAS, the form of presenting the information on the credit "wasn't perceived by the consumers". Yep, that's GE, always illuminating, until darkness suits them better.
Update of February 25, 2008: In Russia, GE Money has reportedly by fined by the Federal Antimonopoly Service for " improper and deceptive loan advertisement"-- that is, for predatory lending. In Australia, furniture seller on credit "Gerry Harvey didn't become a billionaire by letting you drop potato chips on a couch interest-free for 24 months. He sells the debt on to GE Money. It in turn sticks you with ultra-high interest loans at the end of the term. One report had a bloke buy a $600 fridge on an interest-free deal. Perhaps sensing he needed money for groceries, GE sent him a $10,000 line of credit -- where any extra spending attracted a rate of 27.99 per cent. Flexi-renting can be confusing, so let's give an example from the Consumer Credit files. One consumer decided to flexi-rent a notebook computer worth about $2000, which worked out at $4.94 a day. After 36 months the rental paid was $4982.04, at which time they had an option to buy the computer for an unspecified "market value." Scamming around the world...
Update of February 18, 2008: From GE Money in Australia, this: "We have people sitting in stores with calculators working out that it's cheaper to take in-store finance on goods they need, while making better use of their funds to pay off the mortgage,'' GE Money retailer solutions managing director Skander Malcolm said. "With big-ticket items, they are even more attracted to the product. For the segment under stress, we've noticed that the rising price of petrol, as much as interest rates, is causing the weekly challenges,'' Malcolm says. In-store finance can be cheaper than relying on credit cards or personal loans, but many finance schemes become more expensive if the buyer does not pay off the debt in full within the interest-free period. Neat trick...
Update of February 11, 2008: As an indicator that savvy predatory lenders for now look beyond the United States, GE Money announced last week that it will move its headquarters out of the U.S., to London. While U.S. consumers continue to suffer from the bender that GE's WMC unit went on -- last week, a GE / WMC loan on Staten Island in New York was deemed unenforceable by a court, as predatory -- GE Money India is seeking a partner for its personal loans and mortgage business. Elsewhere, the company has formed a joint venture with Wizard Home Loans of Australia for its home loans business.
Update of February 4, 2008: GE on the Gulf, from a press release last week: "GE's Aviation business signed orders of $10 billion in products and services at the Dubai Airshow 2007... GE Money formed a joint venture with Al Futtaim Group, a UAE-based diversified business group, to provide consumer finance products." GE takes predatory lending to the UAE...
Update of January 28, 2008: In Australia, GE Money "has dropped partners that sold few mortgages and retained about 40 of the strongest partners. The credit crisis has affected the mortgage origination business through higher funding costs. However, GE Money CEO Mike Cutter says mortgages continue to be one of the company's major products." Yes, GE continues exporting predatory lending...
Update of January 21, 2008: GE Money said last week that a computer tape with the credit-card information on 650,000 customers of J.C. Penney Co. and other retailers is "missing." GE Money is notifying consumers that a backup tape is missing from a vendor's storage facility, spokesman Richard Jones said. Jones refused to identify the retailers whose customers will be notified, beyond J.C. Penney. "This is not an instance of theft," Jones claimed. "The investigation does not indicate that there was any wrongdoing whatsoever." We'll see.
Update of January 14, 2008: GE has repaid some but not all of the corporate welfare it received in New York State. The Empire State Development Corp. has recovered only 60 percent of $800,000 it doled out to GE's WMC subprime mortgage unit to create jobs that never materialized. Now the WMC office at 1 Ramland Road in Orangeburg, NY is closed. GE has said it would hire 300 workers within three years and keep them in place through 2010. The Rockland County Industrial Development Agency also provided WMC with a break on sales tax on the purchase of up to $3.5 million in equipment and related expenses, a benefit that was valued a $97,000 through the end of 2006. IDA Executive Director Ronald Hicks has said the agency will seek reimbursement plus penalties. Watch GE try to wriggle out of that one, too...
Meanwhile, the Office of Thrift Supervision with little to no notice to the public has give GE the green light to open a subsidiary of its savings bank in China...
Update of January 7, 2008: In Thailand, Bank of Ayudhya's tie-up with long-time retail partner GE Capital was first announced in August 2006. By the end of September 2007, GE had taken a 32.8% stake in BAY on a fully diluted basis, with the Ratanarak family's holdings reduced to 25.1%. GE Money Retail Bank was closed and assets were transferred to the Thai bank, which also announced the acquisition of GE Capital Lease, a local auto hire-purchase provider. BAY's vision is an ambitious one, with a target to be ''Thailand's most admired universal bank." But with GE's reputation...
Update of December 31, 2007: GE Money is using call centers in Barbados and Puerto Rico. And check out this cryptic announcement: " GE Money Bank has opened its first lending and cash offices in the Southern federal district - in Krasnodar (ul. Krasnaya, 29) and in Rostov-on-Don (ul. B. Sadovaya, 20/38)"...
Update of December 24, 2007: How green is GE's valley? GE announced last week it is investing $54 million to become part owner of a ship drilling for oil off the coast of Brazil, and that "the equity investment in offshore drilling is a first for GE Energy Financial Services." And now, a FCC rule change has been jammed through which will allow a company in the 20 largest markets to own both a newspaper and a radio or television station...
Update of December 17, 2007: Pundits name JPMorgan Chase as along the most likely candidates to buy GE's credit card unit, which issues private-label and cobranded cards with a number of retailers like Wal-Mart Stores. Good luck...
Update of December 10, 2007: The WSJ of Dec. 6 reporting on a "loan application, which the lawyer had obtained from [GE's] lender WMC Mortgage Corp., included bogus claims and documents intended to qualify the housekeeper for a loan that was far beyond her means to pay. In sworn testimony, Ms. Costa said she had no knowledge of the fake documents and hadn't seen all the completed forms. The loan application falsely stated that Ms. Costa was a 'U.S. person' and earned $12,500 a month -- six times her actual wages." GE - a partner in fraud...
Update of December 3, 2007: Prosecutors arrested a former top Japanese defense bureaucrat and his wife yesterday on suspicion they accepted lavish gifts from companies -- including one firm linked to General Electric Co. -- in exchange for contracts, officials said. Former Vice Defense Minister Takemasa Moriya, 63 years old, was arrested on suspicion he accepted a dozen free golf trips valued at about 3.9 million yen ($35,850) from 2003 to 2006, knowing that favors were expected in return, the Tokyo District Prosecutor's Office said in a statement... One of the defense contracts under scrutiny is the ministry's 2004-05 purchase of five General Electric C-X engines for next-generation Japanese cargo aircraft. The deal was handled -- without bids -- by Yamada Yoko, which was a Japanese agent for the 600 million yen GE engine at the time, a Defense Ministry spokeswoman said.
Update of November 26, 2007: GE will build two power stations in Turkmenistan. "President Gurbanguly Berdymukhamedov has given the American partners a concrete task: build two new power stations in Ashgabat," Vatan television reported last week. The government had discussed modernizing the "entire electrical system" with an official from General Electric, the report said. Top European Union and U.S. energy officials were in Turkmenistan on Thursday to discuss foreign investment in the energy sector of the gas-rich ex-Soviet nation. Foreign investors have been paying increased attention to Turkmenistan since the death last December of eccentric dictator Saparmurat Niyazov. His successor Berdymukhamedov has signaled he is open to closer relations with investors. But human rights are still an issue -- though not to GE, apparently...
Update of November 18, 2007: GE Money Singapore looks down-market, its CEO Iqbal Singh told reporters during the company's recent fifth anniversary celebration. Alongside high-rate personal loans, GE will roll out a credit card with a limit of $500, and pitch its high-cost loan products at 400 electronic payment kiosks across the island. Yoshiaki Fujimori, CEO of GE Money's Asia operations, said-in-a-statement, "This represents our long- term commitment to Singapore and our confidence in this market." Indeed...
Update of November 12, 2007: GE is gunning for the Bank for Foreign Trade of Vietnam, the third-biggest commercial bank in the country. The Vietnamese government plans to sell at least 15 percent of the company, known as Vietcombank, the people said Thursday, declining to be identified as discussions are confidential. The stake may be worth about $700 million... HSBC, the largest bank in Europe by market value, bought a 10 percent stake in Bao Viet Insurance & Finance for $255 million in September.
Update of November 5, 2007: BizWeek says Rita Childers, 76, thought she had left behind an $855 bill owed to GE Money Bank, a unit of General Electric's (GE) finance division, when the account was discharged in a Chapter 7 bankruptcy she filed in 2005. The former real estate agent in Klamath Falls, Ore., had quit her $30,000-a-year job to care for her husband, who suffers from Alzheimer's. Social Security and his veteran's pension didn't cover their bills. After the Chapter 7 case, Childers fell behind again and filed under Chapter 13, which allows debtors to repay creditors over time. GE Money had transferred the account to a debt collector that filed new claims in the Chapter 13 to recoup the canceled $855 debt. In April, Childers sued GE Money, which then withdrew the claim, citing a paperwork mistake. In an e-mail, GE Money said it tries "to avoid these errors and fixes them if they occur." Yeah but they just keep occurring...
Update of October 29, 2007: Hungary's Office of Economic Competition (GVH) has fined GE's Budapest Bank HUF 12 million, saying GE misled its customers in advertisements regarding the interest-free usage of credit cards. GE failed to note in its ads that the interest- free usage was only valid when the cards were used for purchases but not for cash withdrawals. The ads also failed to inform customers that the entire debt had to be paid by the given deadline for interest-free usage.
Update of October 22, 2007: GE Money gets into the closet -- Closet Tailors, that is, with yet another private-label credit card deal, click here.
Update of October 15, 2007: Revolting revolving door: on the American Bankers Association's committee to weaken anti-money laundering laws are a slew of former regulators, including Richard Small, the Federal Reserve AML "guru" who sold out to Citigroup then GE Money. GE Money hired from the agencies, and now use Small to lobby for de-regulation...
Update of October 8, 2007: The NYT of October 5 ran a piece sucking-up to GE, beginning
David R. Nissen, who runs GE Money, remembers how the corporate powers at General Electric used to react whenever the subject of joint ventures came up. ''The basic philosophy was, 'If you don't have full control, don't do the deal,''' Mr. Nissen recalled. Times have changed. In South Korea, GE Money, G.E.'s retail lending arm, has 43 percent stakes in Hyundai Capital and Hyundai Card, which offer auto loans, mortgages and credit cards. It has formed joint ventures with several Spanish savings banks to provide consumer loans and credit cards. And it has a consumer banking venture with Garanti Bank in Turkey, in which G.E. and the Dogus Group, Garanti's parent, each own 25.5 percent, with the rest owned by institutional investors. Garanti manages that venture. Joint ventures ''have been one of our most powerful strategic tools,'' Mr. Nissen said, noting that net income for the ventures is growing at twice the rate of his core business.
And not a word about GE's overseas subprime lending, nor last week's focus, its U.S. cosmetic surgery loans. The secret predator...
Update of October 1, 2007: Beyond predatory mortgages, GE lends for cosmetic surgery. How do you think they foreclose? From the Detroit News: "Jawana Edwards, a Redford Township mother of two, contemplated surgery to flatten her tummy for two years, but it was out of her financial reach until this summer, when she learned about medical loans available through her plastic surgeon's office. Edwards, 36, borrowed $6,000 from CareCredit, a unit of GE Money that contracts with doctors to provide medical loans for patients. She had the surgery in July, and convinced her friend and sister to finance their own tummy tucks this summer through the same lender... CareCredit won't disclose the dollar increase in its loan volume, but President Mike Testa said the 20-year-old company has grown 50 percent a year for the past five years. CareCredit... considered the largest lender of its type in the country -- growth it has achieved in large part through winning endorsements of state and national medical and dental associations." GE Money's Nip / Tuck -- is this predatory lending?
Or how about this, from USAT -- This year, GE Money reissued J.C. Penney store cards as general-purpose MasterCards that can be used anywhere, not just at the department store. GE declined to disclose the number of cards affected."
And this just as the industry is said to be reconsidering its predatory lending practices, and GE claims to have sold its problems off, GE sends out unsolicited credit cards...
Update of September 24, 2007: During the upcoming month Brussels will look into the takeover of mini-BPH by GE Money. For EUR 625.5m the Americans are supposed to buy 66 percent of the bank, which remained after the division of Bank BPH. GE Money will buy the smaller part of the bank with 200 outlets. The bigger part will be merged with Pekao SA .
Update of September 17, 2007: In New Zealand, used car lender Senate Finance has signed a deal with GE Money. Under the arrangement GE Money will start financing Senate's lending book while Senate will continue to operate as a loan broker and to service its network of dealers and customers. A wholly owned subsidiary of Dorchester Pacific, Senate lends in the Auckland used car market, and was previously funded exclusively by Dorchester. "It's business as usual at Senate," Dorchester Pacific chief executive Andrew Walker said.
And at GE Money, which will apparently buy high-cost loans from anywhere...
Update of September 9, 2007: In Budapest on September 5, 2007, the investment chief of GE Money's Budapest Bank Peter Duronelly predicted that the crisis on the US subprime mortgage market is limited to the US. He added that it is "more a social crisis than a capital market crisis." We'll see.
Update September 3, 2007: GE is oily in at least two ways. As it bristles to leave Japan's consumer finance market, in which interest rate caps are belatedly being imposed, last week GE to buy Britain's Sondex PLC for $582 million, "expanding its oil-services capabilities at a time when major energy explorers rush to extract oil with prices at historically high levels"....
Update of August 27, 2007: In non-U.S. predatory lending news, GE is considering leaving Japan now that consumer protections are in place...
Update of August 20, 2007: From DJ Bogota: "General Electric Co. (GE) announced a plan to carry out a tender offer to buy as much as 10.69% of Colombia's Red Multibanca Colpatria SA (COLPATRIA.BO) from minority shareholders to boost its stake in the bank, the U.S. company said Monday in a filing to the Colombian securities regulator...In February, GE announced it had agreed to purchase a 39.3% stake in Colpatria, Colombia's ninth-largest bank in terms of assets, from Grupo Mercantil Colpatria, a Colombian holding company." And whatever GE did with its WMC subprime unit in the United States, GE Money is still committed to exporting the predatory lending model it has learned...
Update of August 13, 2007: The UK Financial Advisor of August 9 reported that the UK "FSA is also understood to be investigating mortgage firm GE Money Home Lending, one of the biggest movers in the increasingly troubled sub-prime market. Experts fear a repeat of the experience in the US sub-prime market where poor standards have led to the market collapsing."
Update of August 6, 2007: In South Korea, GE has 43 percent stakes each in Hyundai Capital and Hyundai Card. GE Money provides auto financing to Hyundai Motors in Australia and Europe...
Update of July 30, 2007: General Electric's accounting practices are again in the spotlight after GE revealed that employees had improperly booked locomotive sales. But according to the WSJ the matter leaves open the possibility that the SEC could find additional accounting issues. According to the filing, the locomotive problems were uncovered by GE's board audit committee during an unrelated SEC investigation into derivative transactions. GE said the SEC staff continues to review "our use of hedge accounting for derivatives, the rail transactions and other accounting practices and procedures, including revenue recognition matters," according to the filing.
Update of July 23, 2007: Seeking the super-profits to be made by exporting predatory lending to the developing world, GE Money Bank "plans to withdraw from Austria and is seeking a buyer for its business in the country," GE Money Bank spokesperson Aida Peter told Austrian daily Oesterreich on July 19, 2007. The move is attributed to the smaller profitability in the country. Earnings in Austria have remained below the expectations of GE, Peter added. The Austrian activities will be sold in 2008., he said. GE Money Bank is said to be interested in foreign investors as potential buyers, informed sources said. German Bayerische Landesbank (BayernLB), which is in the process of taking over Austrian bank Hypo Group Alpe Adria (HGAA), is said to be among the possible candidates for buying GE Money Bank Austria.
But it makes sense to GE to remain in the Czech Republic, since it has received corporate welfare, upheld by the European Commission, which announced last week it has decided that the state-aide guarantee measures and other measures in favor of the Czech banks Agrobanka Praha a.s. and GE Money Bank a.s. (former GE Capital Bank a.s.) are compatible with EU state aid rules and has closed its formal investigation procedure. Ahead of Czech accession to the EU in May 2004, the Czech Republic notified the EC a series of measures in favor of Agrobanka Praha, a.s. and GE Capital Bank, a.s. adopted by Czech authorities during 1996 to 1998 to assist the restructuring of Agrobanka Praha, a.s. and facilitate its sale to GE Capital Bank. "As a result of the formal investigation proceedings, the Commission decided that the measures constitute state aid within the meaning of Article 87 (1) of the EC Treaty," the EC said. That is, legalized corporate welfare for GE...
Update of July 16, 2007: GE on July 13 announced plans to sell subprime WMC Mortgage after suffering more than half a billion dollars in losses from the business in the first half of 2007. GE may sell other financial-services businesses during the third quarter, too, CEO Jeff Immelt said. GE was the fifth-largest subprime mortgage originator last year, offering more than $33 billion worth of the low-end home loans to poorer borrowers with blemished credit records, according to IMF. Its WMC unit accounted for 5.5% of the $600 billion business last year. "We've got good opportunities to review assets right now," Immelt said. "We're going to go through the strategic review and you'll hear about it as we make our final decisions." Can you say, the ex-Conseco?
Update of July 9, 2007: The UK Daily Mail reports that the Financial Services Authority is understood to be investigating mortgage firm GE Money Home Lending for its troubled 'sub-prime' lending...
This week, an ex-Fed regulator who monetize his expertise and access at GE: "If it's now 2007 and the control failure occurred in 2005, 2004 ... is there going to be any value to law enforcement, any value to the government in finding things that happened two or three years ago and reporting it now?" The speaker of these words was identified by the American Banker newspaper as "Richard Small, the global anti-money-laundering leader at GE Money, the consumer and small-business financial services division of General Electric"...
Update of July 2, 2007: GE Money will reportedly install an $11 million call center in Guatemala that is scheduled to be operational by May or June next year. The call center will employ some 1,400 Guatemalans and the decision comes after more than a year of studying where to put it, the newspaper quoted GE Money's Latin American director Edmundo Vallejo. The center, which is being built in conjunction with Banco America Central, will primarily serve both the bank's local clients as well as Spanish speaking GE Money customers in the US and Mexico.
Update of June 11, 2007: GE Money's Budapest Bank said last week that it will increase the headcount at its new operations center created in Bekescsaba last year at a faster rate than originally planned, to 400 by the end of 2007. Bekescsaba mayor Gyula Vantara said the bank had helped to reduce the region's high unemployment rate, with some 98% of current staff coming from registered unemployed people.
Turn them all into predatory lenders...
Budapest Bank is one of Hungary's top ten banks, employing 2,800 people and operating 84 branches and nine specialized loan shops around the country.
Update of June 4, 2007: Among the consortium trying to buy Doral Financial Corp. is not only Bear Stearns, but also... GE.
Update of May 28, 2007: Mystifying subprime: GE has rejected any suggestion of a bad debt problem for its local consumer and business finance operations after a jump in the reported level of impaired loans last year. A spokesman said the accounts for GE Capital Finance Australasia, as reported yesterday, did not fully reflect the performance and profitability of the operations. ''This particular legal entity includes some parts of our commercial finance and some parts of our consumer finance business, rather than our actual operation,'' the spokesman said. GE Capital Finance includes the AGC consumer and business finance operations, acquired for $1.65 billion from Westpac five years ago.
Update of May 21, 2007: From a report last week, 2006 subprime mortgage volume and status of GE's WMC Mortgage $33,162 Has cut 50% of staff, major buyback issues.
Update of May 14, 2007: Copy cat -- GE's Japanese unit said it succeeded in its bid to take over Sanyo Electric Credit Co. as part of the U.S. conglomerate's move to boost its corporate-finance business in Asia. The unit, STV Partners, said it will pay $1.05 billion to acquire 97.15% of outstanding shares in the financing firm...
Update of May 7, 2007: In further spead of predatory lending news, in Poland "GE Money will buy the part of Bank BPH which will remain after it is merged with Pekao. The new owner will gain a bank with 200 branches, which will service individual clients (some 400,000) and small companies. Large companies, together with the bigger part of BPH, will be taken in by Pekao SA. The only company which will remain after the division, will be an investment fund company. BPH Chairman Jozef Wancer says he is pleased with the fact that the process of choosing the new investor is coming to an end. He added that while inspecting BPH's financial condition, GE was optimistic about the Polish economy, as well as the banking and financial sectors over the next 5-10 years. On Friday, UniCredit gave GE Money the exclusive negotiation rights on the matter of mini-BPH. Meanwhile, in Warsaw shareholders of BPH and Pekao SA decided about the division of the former and merging it with the latter. In both cases, minority shareholders objected."
Update of April 30, 2007: It was reported last week that GE's WMC's subprime mortgage lending grew four percent from 2005 ($31.7 billion) to 2006 ($33.1 billion). Meanwhile, Citigroup analysts said GE should spin off NBC Universal, GE Money and the real estate division. "GE's size and complexity is working against investor interest in the stock and has contributed to further valuation erosion," the Citi analysts wrote.
Update of April 23, 2007: Thailand's Bank of Ayudhya last week said it expects its net lending to grow this year by THB42 billion, or 9.3%, as a result of operational reforms following a partial acquisition by General Electric earlier this year. Consumer loans, mainly mortgage lending, which makes up about 15% of the bank's total lending, will be a growth driver this year, bank President and Chief Executive Tan Kong Khoon told a press conference. Subprime, anyone?
Update of April 16, 2007: From Kathryn Kranhold's April 14 WSJ story: "The strong performance of the financial units came despite troubles at GE's WMC Mortgage unit, one of the biggest U.S. subprime lenders. GE said it set aside $500 million in pretax reserves to cover losses at WMC. GE has offset some of the losses by selling some assets. But analysts said WMC probably cost GE about four cents a share in earnings, more than the two-cents-a-share impact they had predicted. Despite WMC's troubles, GE said profit at its consumer-finance group, GE Money, rose 2% to $851 million. Mark Begor, GE Money's chief executive of the Americas region, said GE had put a 'fence' around the subprime losses."
We'll see if that "fence" is tall and strong enough...
Update of April 9, 2007: In a study of the just-obtained 2006 mortgage lending data, ICP & Fair Finance Watch have identified disparities by race and ethnicity in the higher-cost lending of some of the nation's largest banks. 2006 is the third year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. Among other findings, combining General Electric's two mortgage units, GE Money Bank and WMC Mortgage, fully 86.89% of 2006 GE mortgages were subprime.
Update of April 2, 2007: GE Money Bank, BNP Paribas, Credit Mutuel are reportedly the final three bidders for the 200 branches of Unicredito's Polish BPH bank currently up for sale...
Update of March 19, 2007: GE Money, now in 54 countries, recently had CEO Dave R. Nissen in India, where he told reporters:
Update of March 19, 2007: Key line from the L.A. Times' story on the mass layoffs at ACC / Argent / Ameriquest: " By drastically cutting costs, the company could be making itself a more viable candidate for a sale." Our take? This way Citigroup gets the layoffs done before it acquires the company...
From March 14 WSJ: "Citigroup Inc. Chairman and Chief Executive Charles Prince got total pay for 2006 valued at $26 million during a year when profit at the giant bank fell more than 12%." Then Mad Money named Prince the Number One on the Wall of Shame, worth upon exit $9 per share...
"We are quite concerned about the US mortgage market where there is a bubble in near prime and sub-prime markets. European economies are doing quite well. The biggest worry in Asia we have is about bubbles in credit cards. It happened in South Korea and Taiwan. Will it happen in China and in India? We don't think so, but there is high growth and intense competition in India."
Update of March 12, 2007: Going subprime in Nova Scotia, GE Money last week "launched its consumer mortgage business in the Maritime provinces, as part of its national expansion strategy. Also known as non-conventional mortgages and offered via mortgage brokers, the GE Money offering is primarily directed to consumers who may find it difficult to qualify for traditional, bank-originated mortgage loans."
And in the U.S., per WSJ, "WMC Mortgage, the home-lending unit of General Electric Co. that caters to people with low credit ratings, has laid off 20% of its work force as part of a restructuring amid an ongoing industry shakeout. WMC had 2,180 employees before the job cuts. The company also closed four of nine branch offices Thursday. It ranked among the top 10 subprime-mortgage lenders last year."
Update of March 5, 2007: GE, as in Thailand, soon Colombia too. GE Money Thailand, a non-bank consumer-finance company, plans to grow 10 per cent this year... Among the company's non-bank businesses, auto financial services for used cars, auto refinancing and motorcycle loans account for 50 per cent of its overall loan portfolio. This is followed by credit-card operations, amounting to 30 per cent and installment finance and personal loans, each accounting for 10 per cent.
GE Money last week announced that it would acquire a minority position in Banco Colpatria - Red Multibanca Colpatria S.A., a consumer and commercial bank based in Bogota, Colombia. GE Money said it will acquire a 39.3 pct stake in Red Multibanca Colpatria in two installments, with options to acquire up to an additional 25 pct stake from Mercantil Colpatria S.A....
Update of February 26, 2007: Hitting bottom, hitting the floor, GE Money announced on Feb. 19 that the company's Sales Finance unit has signed a new multi-year agreement with Mohawk Industries, a flooring and carpet manufacturer. GE Money handles all financing transactions with no liability to Mohawk for credit losses....
Update of February 19, 2007: In the Philippines, GE Money Servicing Co., is looking at the Subic free port zone as prospective site for the expansion of call center operations. GE Philippines country manager Renato Romero and GE consumer finance servicing head Sanjeev Jain with local partner Genpact vice president Cecilia Ampeloquio visited the free port and expressed guarded interest to set up its call center operations there. GE Consumer Finance acquired Keppel Bank, its entry into the Philippine market...
Update of February 12, 2007: From the mailbag:
Subject: Another GE Money Card Deception
From: [Name withheld in this format]
To: Inner City Press
It's still happening. I was amazed to find your website... Some of your contributors wrote about the exact same problem that we have run up against. My wife was having some extensive necessary dental work done when the dentist suggested that she use the GE payment process for the work. It was explained that it is non interest loan as long as payments are made on time each month. She agreed, the dental office called GE, GE called me at work and I gave them my information. Never was it mentioned that payment would be due in a year.
In an effort to maintain our good credit, when I received the first bill, I went to their online web site and set up automatic monthly payments to insure payment was sent and received on time each month. Never did I notice (if it was there) any reference to the fact that the balance needed to be paid off in one year. Towards the end of 2006, I reviewed the current mailed statement to see if there was an interest statement and was shocked to see the balance was about $1,100 higher than the original $4,000 borrowed. I called the office and was told rudely that we owed that amount and nothing could be done. I asked for a supervisor or manager and, the only thing that did was escalate the level of rudeness with the supervisor yelling at me that we should have paid it off and that was the way it is, no discussion. I even offered to pay off the whole amount that day and was told that didn't matter as I owed the whole amount whether paid that day or not. The adding back of the interest was not the final straw, they also begin charging interest at 22.98%. I have excellent credit, credit cards with less than 9% rates (paid in full each month), a home equity line of credit at less than 8% (yes, below prime) and I have no reason to accept credit at loan shark rates.
I will be writing the California Department of Financial Institutions, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision to let them know about these predatory practices. I have also prepared a letter to the Chairman of the Board of GE, Jeffrey R. Immelt and the President and CEO of GE Money, David Nissen. Now that I know that I was not the only one caught in their trap, I will continue to fight this. $1,100 may not be much to GE but it is very much to me.
Update of February 5, 2007: Sleazy GE in Britain: under the name GE Money, GE has long been named as the highest-cost credit card lender in the UK. Last week, the UK's Financial Services Authority fined GE Capital Bank, the company's store card operation, more than 600,000 pounds. The FSA said GE had "failed to ensure it had proper controls for the selling of insurance, and that it had failed to treat customers fairly." And in the USA?
Update of January 29, 2007: GE is studying, promoting and engaged in predatory lending, also in the UK: "Mortgage brokers believe that by 2010 sub prime mortgages and other specialist lending will account for 24% of their business. Growth in the specialist mortgage market within the direct broker channel will outstrip general growth in this market by two to one, according to estimates from GE Money Home Lending (GEMHL). Recent research by GEMHL amongst mortgage brokers found significant appetite for specialist mortgage products such as Buy to Let, Non-conforming and Sub prime. Entry into the direct market represents a further step towards diversifying GEMHLs distribution network and offering within the marketplace, the lender said. Initially, GEMHL will offer brokers its new products through one of the UKs biggest Mortgage Club and Network - Mortgage Intelligence including its new Buy to Let and Non conforming deals. GE Money Home Lending intends to continue to grow this channel throughout 2007, potentially working with further selected networks and mortgage club partners during the year. Our significant experience in developing compelling and attractive product propositions in the specialist mortgage market, coupled with expected future growth potential in this channel, makes this an exciting launch for us, said Duncan Berry of GEMHL."
Update of January 22, 2007: In Mexico in 2006, GE Money Credito Hipotecario had a loan portfolio of $600 million, almost three times higher than in 2005.The company extended 3,200 loans in 2006 for the $600 million. $25 mln of the loans were to foreigners for the purchase of tourist properties in Mexico, including the condos in Rosario Beach, south of San Diego...
Update of January 14, 2007: GE Money and consumer finance continues foray into Central America. GE's BAC-Credomatic Holding Co. is now proposing to buy privately held Honduran bank Banco Mercantil SA, without disclosing the terms. Banco Mercantil has about $700 million in assets and $500 million in deposits. It has more than 1,000 employees. GE syas that the deal is expected to close in the next few months, subject to regulatory approvals...
Update of January 8, 2007: Corporate welfare to GE: The European Bank for Reconstruction and Development trumpeted last week that it is extending a EUR 5 million loan to Budapest Lizing (BL), a subsidiary of GE Money's Hungarian bank Budapest Bank. Balazs Bati, BL's Managing Director bragged that by taking this credit line, BL becomes the largest borrower under the finance facility in Hungary... In Thailand, GE's investment also included the transfer to BAY of 2.05 billion baht worth of loans, 43.3 million worth of fixed assets and 1.41 billion in deposit liabilities from GE Money Retail Bank. The purchase price of the assets and liabilities was estimated at 690.37 million baht, and "will be finalized within 120 days from the transfer."
Update of January 1, 2007: Funny ads, predatory lender. GE Money issues private-label cards for Ikea and began piloting kiosks a year ago. Michael Ettlemyer, a spokesman for the unit of General Electric Co., said it has installed three to five kiosks at each of Ikea's 29 stores around the country. At some stores, shoppers can apply for cards by swiping their driver's licenses at manned tables, and GE is trying to incorporate this capability into the kiosks, Mr. Ettlemyer said. They'd like to make you a loan you didn't even know about, at terms you never agreed to....
Update of December 25, 2006: Last week, Jeff Immelt announced the appointment of John F. Lynch as Senior Vice President of Human Resources... Previously, Lynch headed HR at GE Global Consumer Finance, which is now GE Money. Before joining GE, Lynch spent 18 years as an HR leader in the commercial and retail finance subsidiary." That is, he knows predatory lenders...
Update of December 18, 2006: GE in China: General Electric Corp of the US is looking at the prospects of exploiting opportunities in China's consumer finance market, Xinhua quoted GE's vice-president Steve Bertamini. Bertamini said GE's consumer finance arm GE Money sees strong growth potential in the Chinese market and that it is now conducting a study on the sector. In October, GE Money teamed up with Shenzhen Development Bank and Wal-Mart (China) Investment Co Ltd for the joint issue of a Visa and China UnionPay dual-labeled credit card, the Wal-Mart Changxiang Card.
Update of December 11, 2006: From Singapore, consider the recent case of helpless car buyers caught between dealers and financiers. A company repossessed five cars from people who did not buy the vehicles from the company and had not defaulted on repayments. GE Money financed two car buyers, who found - to their horror - that their cars had been towed away by Kenso Leasing in October. These buyers thought they had no relationship with Kenso. But as elsewhere with GE Money, the consumer is left in the dark until they get foreclosed on...
Update of December 4, 2006: A scandal is growing in Ireland, leading to the introduction of legislation to close off a loophole in Irish law that allows subprime financial service companies to operate without being regulated by the Irish the Consumer Protection Code. Unregulated firms can avoid supervision for solvency purposes and are not subject to 'conduct of business' checks by the regulator. Among the companies named as not regulated is subprime motor loan provider GE Capital Woodchester Ltd has admitted it was not regulated, saying in a statement that "The company is supportive of regulation and consumer protection and has chosen to comply with the Consumer Protection Code, although it's not obliged to do so for its loan products."
Update of November 27, 2006: From last week's Stamford Advocate -- "David Nissen, president and chief executive officer of GE Money, the company's consumer lending unit, detailed GE's operations, from jet engines, locomotives and appliances to financial products and health-care and security technology. Nissen's division garners 75 percent of its earnings from outside the United States. The financing business started in 1932 when the company realized customers needed financial help to buy appliances during the Great Depression, he said. GE's Commercial Finance is GE Money's sister operation. 'In 1992, we decided to go international. It turned out to be a great success. We'll make $3.5 billion this year,' Nissen said. The unit has grown through acquisitions, establishing offices in 53 countries, he said, noting that it has 100 employees devoted to conducting due-diligence investigations into potential purchases. 'We've been averaging 15 percent asset growth per year,' Nissen said, estimating that nearly 50 percent of GE's profits come through its financial operations" -- which are virtually unregulated....
Update of November 20, 2006: In India, GE Money Financial Services Ltd, which is raising Rs 3,225 crore. According to a report by rating agency Cresil, "GE Money Financial Services finances consumer durables, automobiles and two-wheelers"... In Thailand, GE Money Retail Bank will transfer its assets and liabilities including all deposits, home mortgages and home equity loans to Bank of Ayudhya on Jan 3, the Bangkok Post reports. The transfer is part of GE Money's decision to acquire a 25.4% interest in BAY. The asset transfers do not include hire-purchase loans and auto-insurance premiums, which will be maintained at GE Money Thailand.
Last week Inner City Press sat down for an interview with the president of the Nagorno-Karabakh Republic, Arkady Ghoukasyan, and asked him about the fires, about the United Nations and other matters. Click here for the footage, on Google Video.
Update of November
13, 2006: GE Money in Ireland: "Fresh
Start Homeloans, which also trades as The Money Group, is based in
Cornwall and is not authorized to do business in the Republic. The
company operates a brokerage promoting personal loans, mortgages aimed
at those whose marriages have broken up and equity release. It also
targets people with poor credit histories, known as sub-prime lending.
Its loans are provided by GE Money." Good job, GE -- not only
predatory, but also illegal.
In GE environmental (injustice) news, Judge David Hurd of the
U.S. District Court for the Northern District of New York rubberstamped
a consent decree between General Electric and the federal government
last week to dredge PCBs from part of the Hudson River...
Update of November 6, 2006: Angering the wrong people? In the UK, "Jack Straw last week pledged to report GE Money's CEO Brad Cooper to trade and industry secretary Alistair Darling after a fellow MP claimed the company had taken advantage of one couple with an astonishing 21.9% interest loan. Siobhain McDonagh, Labour MP for Mitcham and Morden in London, complained to Straw that two of her constituents, Mr and Mrs Webster, face the prospect of being evicted from their home because they have fallen behind on a loan provided by GE.... Straw told MPs that he would seek to open up a debate on the issue and would pass on his concerns to Darling. And he told McDonagh: 'My honorable friend might wish to invite the company's chief executive to the House to explain its policies because GE claims to be a company of high status and high standing.' GE has since arranged a meeting with McDonagh on November 9 to discuss the Websters' case."
As they do in the U.S., maybe GE will try to buy silence, without changing its practices...
Update of October 30, 2006: From a list last week of major subprime lenders: " WMC is owned by GE which stopped reporting its production in late 2005." As Inner City Press has previously reported, GE "disappears" the data of the subprime lenders it buys, like Greentree / Conseco...
Update of October 23, 2006: GE's predatory lending has gotten it in trouble in Japan. The Financial Services Agency has told GECF that it is considering penalties against the group for breaching Japan's moneylending law by calling a borrower at his workplace, even after the borrower had asked GECF not to contact him there. GE has admitted the violation, issuing a statement last Wednesday that "We apologise deeply for the trouble we have caused." The company faces penalties ranging from a few days' suspension of business at the offending branch office to a wider suspension involving offices throughout Japan. In April, Aiful, one of Japan's leading moneylenders, was ordered to suspend all lending operations for up to 25 days after a borrower complained it had allegedly used illegal debt collection tactics. FT.
This might be a lesson to U.S. regulators, that rather than set monetary fines (which mean little to companies the size of GE), stopping all business for a period of time is a fairer punishment...
Update of October 16, 2006: Announced Oct. 13: GE Money proposes acquiring a 98 per cent stake in Latvian Baltic Trust Bank from Russian titan Oleg Boiko. It is planned that the deal could be completed in November this year. One hopes that the Latvian bank regulators will be objective in considering GE's record of predatory lending...
Update of October 9, 2006: GE Money plans to enter the Colombian financial market, the newspaper Portafolio reported on October 5, 2006. A number of articles in the Colombian press have recently opined that GE Money is interested in the privatization of the public bank Bancafe...In India, GE Money has over 170 offices of its high-cost consumer finance, non-banking finance company. Here's GE Money Bank, not overseas but in Texas:
Subject: FW: GE Money Bank and Potential Fraud
From: [ ]
To: MLee [at] innercitypress.org
Sent: Sat, 7 Oct 2006 6:14 PM
Dear Mr. Lee, I am writing to you after reading several online postings
about the deceptive business practices of GE Money Bank. Below is a
record of discussions that the Cash Office of IKEA Frisco, Texas has
had with GE Money Bank (Kate and Dennis in the emails below). We
were offered and granted by IKEA a "24 month no interest no payment"
purchase plan when we purchased a kitchen from IKEA in July 2006.
Since then, GE Money Bank has sent us bills for finance charges, late
fees, and minimum payments due on our account in total disregard for
the terms of our purchase agreement with IKEA. The IKEA sales rep
on the floor of the kitchens department and the after-sales
department told us numerous times that we made this purchase on a 24
month no interest no payment plan, and we would not have made this
purchase under any other terms. The only way they were able to
sell this bill of goods was by their promotional offer. I can
tell below that IKEA has contacted GE Money Bank numerous times to tell
them to fix the terms of our plan to the "No Interest" plan, and GE
Money Bank still has us on a fixed payment plan at 13% interest.
Kate below writes that she has taken care of everything, but what she
writes is that she put us on a deferred interest plan, which is very
different from the No interest plan. Also, I got a call from
a GE Money Bank debt collector early this Saturday morning, and she
says that there is no evidence that IKEA ever placed us on a
promotional plan, and she has no evidence that IKEA has ever contacted
GE Money Bank to change our plan! GE Money Bank is either intentionally
misapplying these promotions or their data processors are absolutely
incompetent. Furthermore, GE Money Bank has entered my wife's name
incorrectly on our account: This is alarming because my wife's
name will now be reported to credit bureaus incorrectly, and it will be
a hassle to correct, and GE Money Bank can use this identity error to
its advantage in multiple ways. In addition, I also recently
opened a credit card with The GAP, and GE Money Bank apparently owns
Gap credit card accounts as well. The disturbing fact about this
is that my name was incorrectly entered on my Gap credit card with GE
Money Bank as well. I am deeply skeptical that these multiple
identity errors are innocent. They appear to be a calculated
policy by GE Money Bank. Please consider my experience as you become
aware of more complaints about the business practices of GE Money Bank.
Update of October 2, 2006: From the Toronto Star of September 25: GE Money, the Canadian consumer-lending business of General Electric Co., is applying to become regulated as a trust company so that it can launch new products like home equity lines of credit. The company has been operating in Canada as an unregulated financial institution for 20 years." And GE has been operating in the U.S. for even longer, as an UNREGULATED financial institution... Until next time, for or with more information, contact us.
Update of September 25, 2006: From a press release last week:
"GE Money, the Canadian consumer-lending unit of General Electric Company, today officially launched its consumer mortgage business in Manitoba, as part of its national expansion strategy. Also known as non-conventional mortgages and offered via mortgage brokers, the GE Money mortgage offering is primarily directed to consumers who may find it difficult to qualify for traditional, bank-originated mortgage loans."
That is, subprime...
Update of September 18, 2006: GE Money is opening a call center in Poland: Genpact and GE Money opened Wednesday its first joint service centre in Poland. The new assistance centre will set out with 50 staff but plans are to add another 250 employees in the future." GE will use the centre to serve customers in Germany, Austria, and Switzerland," said Zoltan Major of GE Money. He added that the centre would not offer services in Poland. Out of a projected workforce of 300, Genpact, which offers accounting and call centre services for companies, will employ 50."Genpact is constantly looking for new locations. We are currently in the process of carrying out due diligence analysis in several cities in Poland and some other European countries," added Major. Predatory lending on the move...
Update of September 11, 2006: GE Money on the Pampas: Argentine consumer finance unit GE Money Argentina expects to grow loans 45% next year to $117 million, GE Money Argentina marketing director Georgie Consoli said last week. GE Money offers credit cards and consumer loans and also insurance where it sells personal and credit insurance policies. GE Money operates through 29 branches in Argentina. GE's consumer finance business includes operations in Mexico, Brazil and Central America. It also runs commercial finance ventures in Mexico and Chile...
Update of September 4, 2006: Regulators in Australia have caught GE Money in a lie. While charging a $25 fee, GE advertised that ''There is no annual fee for your GO MasterCard. That means it costs you nothing to have it - pay nothing and make it your card of choice year after year.'' Australian Securities and Investments Commission charged that the statement was likely to mislead customers. Ya don't say... This follows an ASIC finding in March 2006 that GE Money had advised clients to take out life insurance when they already had coverage. As we've reported, GE is taking predatory lending global.
Update of August 28, 2006: Hung[a]ry to lend on homes: GE Money Bank's Monika Kubovcova said the growth would be also boosted by households' higher incomes and the character of home ownership. In the Czech Republic, 54 per cent of homes are privately owned, compared to 80 per cent in Italy and Spain, but just 40 per cent in Germany, said Kubovcova. "At present, only about 3 per cent of Czechs have a mortgage, as there are some 198,000 active mortgages," said Kubovcova [drooling].
Update of August 21, 2006: Hungry for more predatory loans: Hungary's Budapest Bank, a member of the US-based GE Money Bank group, recorded a 22% year-on-year (y/y) increase in net income to HUF 4.86 bln in the first half of 2006, as the company registered strong growth in interest income thanks to its dynamically-growing lending portfolio, according to figures released by the company on Friday. "Retail lending once again played a key role in the significant expansion of our lending portfolio in the first half of the year," GE wrote in a statement. No word on the interest rates...
Update of August 14, 2006: GE's spin in the Czech Republic, August 11: " US' GE Money Bank's Czech unit generated a profit of CZK 1.6 bln, which means 20% growth year-on- year in the first half of 2006, according the Czech accounting standards, the bank stated Friday. 'The net profit of GE Money Bank increased, year-on-year by nearly 20%, amounting to CZK 1.6 bln as of June 30, 2006,' GE Money bank spokesperson Eva Chaloupkova said. 'The growth of the total assets to more than CZK 69 bln was driven by the increase of personal loans and SME loans, mortgages, GE Money cards and current accounts,' GE Money Bank's CEO and Country Manager for the Czech and Slovak Republics Pieter van Groos is quoted as saying in a press statement."
Update of August 7, 2006: Subprime Singapore -- GE Money runs ezyCash, an unsecured loan scheme for lower-income borrowers through Singapore Post branches...
Update of July 31, 2006: From the National Business Review in New Zealand last week:
GE Money has already acquired struggling online banker Superbank, sources say. When asked to confirm whether the global finance company had acquired Superbank, GE's Australasian communications manager, Keith Ritchie, said: "We don't comment on market speculation." When Superbank spokeswoman Pauline Ray was approached about whether the business had already been sold, she said: "We don't comment at all on market speculation. That's our comment." Speculation has been rife that Superbank will be sold or forced to close its virtual doors. But a well-placed source says the purchase has taken place and the buyer was GE. In January, GE regional chief Tom Gentile said a personal banking business was the missing link in the company's Australasian business, as it was a "huge part" of GE's global strategy. It had started the process of applying for an Australian banking license. "Sometimes we enter markets through acquisition. Other times it's through organic growth," he was quoted as saying. Superbank was founded as a joint venture between Australia's St George bank and Foodstuffs. It is an online-only banking service and was one of the first proponents of high-interest, low-fee savings accounts that could only be accessed through the internet.
So wait -- in New Zealand, there are bank acquisitions without regulatory approval? Or without any pre-consummation notice to the public? Just the way GE likes it...
Update of July 24, 2006: In Singapore, GE Money's ezyCash scheme charges an effective rate of 21.48 per cent for amounts lower than $8,000 and about 19 per cent for $8,000 and above. Source: Business Times Singapore, July 20, 2006.
Update of July 10, 2006: Last week from Latvia: GE Money announced its entry into new car leasing, so with the acquisition of the portfolio of Stars Lizings, a subsidiary of local car dealer Domenikss. "GE Money expects to develop car leasing services in Latvia and become the market leader in the sector," said Dmitrijs Cimbers, GE Money board chairman. Latvia GE Money had been present only on the used car leasing market since it entered the Latvian market in May 2004. GE Money analysts estimated that at present the company is the market leader in used car leasing sector, taking about 30% of the market.
GE lending on used cars in Latvia -- who knew?
Update of July 3, 2006: From a job notice: "GE Consumer Finance is hiring a CRA Manager who will coordinate internal and external stakeholders to implement community development strategies for GE Money Bank (GEMB) and GE Capital Financial Inc. (GECFI) . This position will be located in Salt Lake City, Utah. GE Money Bank and GE Capital Financial operate within the GE Consumer Finance-Americas unit and are engaged in various consumer financing activities including personal loans; mortgages; bank, private label and co-branded credit cards; corporate travel and purchasing cards; home equity loans; debt consolidation; and credit insurance. GE Consumer Finance is a wholly owned subsidiary of General Electric Company. Key Job Responsibilities include: Identify community development loan and investment opportunities" -- and help GE to continue evading the Community Reinvestment Act...
Update of June 26, 2006: On the move in the Philippines, with its high cost lending model: General Electric's financial services unit GE Money launched its banking operations in the country with the opening of a 30-branch network under GE Money Bank Philippines. Then Credit card firm Bankard Inc said its board has accepted the proposal of GE Consumer Finance to purchase all Bankard assets and assume all business-related liabilities. In a statement, Bankard said the purchase offer will be submitted to stockholders for approval in a meeting set on July 28."
GE is notorious for its high-cost credit card, denounced for example in the UK...
Update of June 5, 2006: High cost loans on Czech furniture -- GE Money Multiservis Czech Republic last week announced that its volume of deals rise by 19% year on year (y/y) in the first three months of 2006 to CZK 2.3 bln, boosted by a surge in furniture lending. "In terms of hire-purchase deals in individual retail segments, an especially dramatic increase was seen in furniture sales, which rose by 512%, as well as in the do-it-yourself market segment, which grew by 77%," GE said...
Update of May 29, 2006: In Oregon, Portland General Electric's coal-fired power plant in Boardman is finally back operating after a four-month shutdown for repairs to its turbine and generator rotors. The shutdown cost utility customers an additional $46 million in extra power costs. PGE has asked state regulators to track the costs of the replacement power and, at a later date, bill customers - GrEat...
Update of May 1, 2006: In a public forum in Brussels last week, marking the formation by NCRC and others of the ICRC, GE's logo was on many a sign, and a business card about GE's "responsible lending," headquartered in Leeds in the UK where GE's high-cost card cards have gotten it in trouble.
Update of April 10, 2006: The 2005 Home Mortgage Disclosure Act data, which Inner City Press / Fair Finance Watch received in late March from GE, reveal that in 2005 GE Money Bank, not even including GE's other subprime unit WMC, made 541 of its 1336 loans to Latinos are higher rates, over the federally-defined rate spread. The Federal Reserve has defined higher-cost loans as those loans with annual percentage rates above the rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. More analysis will be forthcoming.
Update of February 27, 2006: GE Money has taken global its predatory model. In Europe it now has operations in Austria, Belgium, the Czech Republic, Denmark, Finland, Germany, Hungary, Ireland, Italy, Latvia, Norway, Poland, Portugal, Russia, Slovakia, Spain, Sweden, Switzerland and the UK (where its high-cost credit cards have made it the subject of parliamentary debate)…
Update of February 20, 2006: In this space on January 23, we described the OTS’ shenanigans in granting fast approval to General Electric, involving HSBC. Inner City Press / Fair Finance Watch raised its complaint to the OTS director and also ombudsman. Last week two responses arrived. OTS Deputy Director Scott M. Polakoff writes that
“while OTS often arranges to send ICP copies of applications during the public comment period, we are not required to do so… OTS responded to your FOIA request by letter dated January 27, 2006.”
That was after the OTS approved the applications. Amazing, that an agency would say it is not required to provide timely requested copies of merger applications prior to approving the mergers. Even the Federal Reserve requires itself to provide copies of applications within three days of a request. The OCC has a policy of extending comment periods if it has not timely provided requested applications. The OTS? It says it is not required to do anything.
Mr.Polakoff goes on to say that the amendment that the OTS allowed, without any opportunity for review by the public, made such review unnecessary: “after the amendment of the application, it was no longer subject to public comment nor was it subject to CRA review.” Sneaky, sneaky. Mr. Polakoff concludes:
“We strongly disagree that OTS’ practices lack transparency and credibility… OTS staff is available to discuss applications and procedures with the public… I understand you have communicated by phone, letter, email and in person numerous times with OTS staff about applications.”
That doesn’t make this agency any more transparent, much less credible… It stands along in weakening CRA, and now, in doling out approvals before even allowing the public to see the applications…
And the OTS’ ombudsman Randy W. Thomas then tersely wrote, on February 15, that “The Ombudsman’s Office does not serve as a duplicate channel when members of the public choose to communicate with the Director or other OTS official. I note that Deputy Director Polakoff responded to your concerns on behalf of the Director.”
So what’s the point of having an ombudsman? Wouldn’t it be about some “communicat[ion with an] OTS official” that one would complaint to the Ombudsman? But the underlying communication allows the Ombudsman to avoid any substantive response – or review…Meanwhile, last week ICP received this:
Subject: GE Money Bank Unfair Consumer Practices
From: [Name withheld]
To: GE-Watch [at] innercitypress.org
Sent: Tue, 14 Feb 2006 19:31:04 -0500
I have the nearly exact problem as another consumer who wrote to you on 18 January 2006. I had opened an account with GE Money Bank in January 2005 with a deferred interest plan, (CareCredit, for dental treatment for my daughter), and had been paying my account as required, with the understanding that I would this would keep my account interest free until I completed my payments. I was not told that I had 1-year to complete the payments or the deferred interest would be added to my account at that point. I too was paying my account, and thought that by paying the required amount by 1 Feb 2006, I was okay. Just as with the other consumer who had purchased the television, in the body of the bill in small print lower on the page GE Money Bank had indicated that my "Promotional Purchase Due Date" was 02/06/2006, and that the "promotional balance" was $492.00. I noticed this but did not know that this meant that I had to pay that amount by that date to avoid the deferred interest being added to my account, and I paid $100 thinking that I was exceeding the required amount due of $19 for the month. Yesterday, I received a bill indicating that I now owe $643.59 because of the deferred interest of $237.97 being added to my account. I immediately called GE Money Bank, spoke to a customer service rep, who told me that I should have called before the due date and they could have explained to me that the full amount was due to avoid the charges. When I asked to speak with a manager, she put on her supervisor, Brock, who was very rude, told me that I should have read the notices every month in the "Promotional Purchase Summary" on my bill, and I would have known that this would happen. He indicated that there was nothing that they could do, that he could not direct me to anyone else, as he was in charge, that he is a Customer Service Supervisor, and that the Customer Service Manager does not take calls from customers. He told me that I have no recourse except to pay the amount owed now, and that it will not be adjusted in any way….Also, what is the possibility of [action] by consumers against GE Money Bank? They are making a lot of money, unjustly, on unsuspecting consumers who trust them.
Yep… Until next time, for or with more information, contact us.
Update of January 30, 2006: General Electric / OTS update: at 5:25 p.m. on Friday, January 27, the OTS faxed to ICP Fair Finance Watch a Freedom of Information Act determination letter about GE’s Belk application. While surely the released documents will arrive in the mail next week, this does not explain how it’s legitimate for the OTS to approve applications before providing any copies to the public. And still no work from the Director or ombudsman, either…
Update of January 23, 2006: The Office of Thrift Supervision has hit a new low. On December 17, Inner City Press / Fair Finance Watch filed two letters with the OTS, on applications by General Electric to acquire the credit card accounts and deposits of Belk’s department stores, some of which were held by HSBC Bank Nevada, NA (f/k/a Household International, notorious settler of predatory lending charges). One letter commented on the application, including with detailed consumer complaints submitted to Inner City Press’ GE Watch. The second letter asked for all related GE applications – Belk’s, HSBC and others – under the Freedom of Information Act. On January 9, Inner City Press got a call from the OTS’ Northeast Region, asking for confirmation that ICP was both commenting on and requesting copies of the applications. Confirmation was given. On January 17, still not having received any of the requested records, Inner City Press emailed an OTS staffer, asking about the GE-HSBC applications. ICP was told that the GE-HSBC applications had been “very recently” amended, to no longer be Bank Merger Act applications. The following day, ICP was faxed copies of two terse approval letters by the OTS’ Northeast Region: a January 12 approval of GE-Belk, and a January 17 approval of the GE-HSBC applications. Copies were never given to ICP, in response to its month-old FOIA request. Worse, the OTS allowed the amended of the GE-HSBC applications just prior to approving them, so that no one in the public could even conceivably have seen the amended applications and commented on them. Like we said, a new low at the OTS.
As while this all went on, here’s another sample complaint against GE received by ICP:
Subject: Re: GE Money Bank
Date: 1/18/2006 8:40:52 PM Eastern Standard Time
From: [Name withheld]
To: GE-Watch [at] innercitypress.org
If the Bank could nail me, they could get most anyone. I had a deferred
payment loan from GE Bank. I had used it to buy a TV. The deadline for
the payment was early January, 2006. Just before Christmas, 2005, a
bill arrived, demanding the usual $94 payment. I paid it without
noticing that in tiny print, well down the bill, was a message saying
that the entire balance was due somewhere around the 7th of January. I
inadvertently paid the minimum again and after the promotional purchase
due date, I received a new bill saying I now owed almost $1,000 in
deferred interest.
The customer service person, and her boss told me that it was too late
to change the result, even if I agreed to pay the remaining principle
in full. I wonder how many people miss the deadline and are saddled
with big interest payments.
Update of December 19, 2005: Inner City Press / Fair Finance Watch has just filed comments with the Office of Thrift Supervision opposing applications by General Electric’s GE Money Bank, including to acquire the credit card bank of Charlotte, NC-based department store Belk. From ICP’s comments:
GE has been getting deeper and deeper into higher cost subprime lending without, ICP contends, sufficient regulatory scrutiny. In fact, quite the opposite: GE “disappears” the subprime lending operations it acquires, removing them the scrutiny that comes along with the public reporting of Home Mortgage Disclosure Act (HMDA) data, which now includes pricing information. In June 2004, GE acquired the major subprime lender WMC Mortgage Corp. (Respondent ID 0458600405-7). This is a lender which in 2004 (including the half of the year it was owned by GE) confined over 65% of African Americans and Latino borrowers to higher cost loans over the federally-defined rate spread (of three percentage points over comparable Treasury Securities on first liens, 5% on subordinate liens. To non-Hispanic whites, the percentage was below 53%. This compares unfavorably with GE WMC’s peers, and militates for further scrutiny. But if the past is any guide, GE will try to take this unit beyond any scrutiny by the public, as it did with the previously HMDA-reporting unit(s) it acquired from Conseco. ICP is requesting public hearings, including on this additional specific data of GE’s WMC Mortgage:
In the New York City MD in 2004, GE’s WMC for conventional home purchase loans confined 55% of African Americans to higher cost rate spread loans, compared to 39.5% of whites. For refinance loans (secured by first liens) in this NYC MD, GE’s WMC confined 36.9% of African Americans and 34.7% of Latinos to higher cost rate spread loans, compared to only 22.1% of whites (African American to white disparity 1.67; Latinos to white disparity 1.57%).
In the Charlotte, NC MSA (Belk’s headquarters) in 2004, GE’s WMC for conventional home purchase loans confined 57.9% of African Americans to higher cost rate spread loans, compared to 40.3% of whites. This compares unfavorably with GE WMC’s peers; ICP is requesting public hearings.
Consider also this sample consumer complaint received by ICP only last week:
-----Original Message-----
Subject: GE Money Bank - Unfair/Predatory Lending Practices
From: [Name withheld but available to OTS on request]
To: GE-Watch [at] innercitypress.org
Sent: Wed, 14 Dec 2005 16:27:53 -0800
I was hoping you could point me in the right direction for getting help with defending myself against unfair and or predatory lending practices of GE Money Bank? I opened a $14k account with them in March of this year through the Honda Card program at a special promotional rate of 6.9% for the first 24 months and payments of $69 for the first 24 months. My contract also reads, "If you do not make your required Minimum Payment within 1 month after the Payment Due Date, the Delinquency Rate will apply to all existing balances..." I have consistently paid my bill well within these guidelines. I learned today that they changed the due date from the 10th of each month to the 5th back in July and claim to have included a notice in all billings. My statement reads, "If you received no additional notice, your account is not effected". I keep everything and have no additional notice. They also included a new stipulation that your payment is now considered "late" if it is not received by the Payment Due Date. Under these new terms, if you are "late" 2 times your account automatically converts to the Delinquency Rate, which is at 28.9%...a 418% increase of my original rate. I spoke to 2 separate Customer Service Reps and one Supervisor (I have the first names, dates and times I spoke to them) and all claim they can do nothing.
GE’s predatory lending is not limited to the United States. See, e.g., “Office of Fair Trading Delivers Damning Verdict on Store Cards,” Cards International, April 2, 2004. GE is under fire not only for high cost credit cards, but also mortgages. See, e.g., “Mortgage Giants Faces Court Over ‘Unfair’ Loans,” Sunday Express, May 12, 2002:
“A support group set up by an ex-teacher is taking one of the world's largest financial companies to court in a case that could save millions for thousands of mortgage borrowers. The National Association of Mortgage Victims (NAMV) will next month ask a court to set a date to hear test cases against US firm Ocwen and international giant GE Capital... the terms of its loans are unfair. Its mortgage interest rates can be doubled if borrowers are late with payments, for whatever reason. High early redemption penalties are also payable.”
Note that GE continues acquiring consumer finance capability, including higher cost / subprime capability, around the globe, from Central America (BAC) through Turkey (Garanti) to the Philippines (Keppel Bank) – and now China and elsewhere. ICP has also requesting any and all information the OTS has its in its possession or control concerning consumer compliance at GE not only in the United States but also overseas. We’ll see.
Update of November 28, 2005: General Electric is now planning not to remove the PCBs it put into the Hudson River, but rather to “cap” thousands of cubic yards of the PCBs at the bottom of the river. This according to a National Oceanic and Atmospheric Administration memo sent to U.S. EPA in October. GE released 1.3 million pounds of PCBs into the Hudson during the decades it manufactured capacitors and other components at its Hudson Falls and Fort Edward plants north of Albany. Last month, GE reached a tentative agreement-on-the-cheap with EPA that would require GE to dredge 43 miles of the river, but that plan has yet to be formalized. Meanwhile, on the consumer finance front, GE is scooping up the private-label credit card assets of department store Belk Inc. (d/b/a Belk, McRae's, and Proffitt's), including $500 million in receivables from 4.2 million cardholders. Welcome to the funhouse...
Update of October 10, 2005: In
the past week, Inner
City Press / Fair Finance Watch has filed comments with regulators in
Turkey and the
Philippines opposing bank acquisition proposals by General Electric
Consumer Finance. This
stealth player, which owns subprime lender WMC in the United States,
confines its
highest-rate lending to overseas (and to protected classes,
particularly Latinos, here in
the Americas).
In
Manila, ICP
has commented HSBC’s proposal to acquire a controlling stake in Keppel
Bank
Philippines, reported in the Washington Post of October 3, 2005: “GE
Consumer
Finance, based in Stamford, will acquire a majority interest in Keppel
Bank Philippines
for $25.8 million.”
Beyond
environmental
GE’s
predatory lending is not limited to the United States. See,
e.g., “Office of Fair Trading Delivers
Damning Verdict on Store Cards,” Cards International, April 2, 2004. These
are the type
of predatory practices that GE has exported to various markets, and now
seeks to export to
Turkey (through Garanti Bank, of which GE proposes to buy 25.5%
from the Dogus
Group, a conglomerate owned by the Sahenk family), the
Philippines and soon China - more on that anon.
Update of August 29, 2005: General Electric last week announced a proposal to acquire a 25.5% stake in Turkey's Garanti Bank for $1.56 billion, from the Dogus Group. “GE said Turkey's expanding banking sector provided growth opportunities.” We'll see (what can be done).
Update of August 8, 2005: General
Electric on August
2 announced a proposal to buy a 43 percent stake in the credit card arm
of South Korea's
Hyundai Motor Co. for $390 million...
Update of August 1, 2005: General
Electric and the
EPA continue to delay in dredging PCBs from the Hudson River. Now the
beginning of the
clean-up is being pushed back to 2007. GE spewed the carcinogenic PCBs
into the Hudson for
forty years out of its plants in Fort Edward and Hudson Falls.
Reportedly,
“negotiations between GE and the EPA bogged down last year when the
company sought to
limit how much sludge it would remove. A plan on which PCB "hot spots"
would be
dredged, which was due in March 2004, was held up until February.” It
has been
suggested that the “EPA should do the cleanup work and pursue the
company for triple
the cost as allowed under federal Superfund legislation governing the
toxic waste removal.
The EPA does not expect to take this more aggressive approach, Rosales
said. ‘The
preference of the agency is to reach an enforcement agreement first,
then have the
polluter pay for the project,’ he said.” Especially
when it’s GE, he could have added, but didn’t...
Update of July 25, 2005: A response from Panama’s Superintendent of
Banks Delia Cárdenas, regarding the proposed “shares acquisition
of BAC Credomatic
Holding Co. Ltd and Vintage Properties Limited toward GE Consumer
Financial Central
Holding Corp... On this matter, we communicate to Inner City Press /
Fair Finance Watch
that this Superintendency of Bank is assessing your opposition.” Well alright...
Update of July 18, 2005: Last
week GE announced it
will buy a gas pipeline from AIG. It’s the Southern Star pipeline
system, through
Kansas, Oklahoma, Missouri, Wyoming, Nebraska, Colorado and Texas; it
is being sold for
$362 million, by AIG Highstar...
Update of July 5, 2005: On July
4, ICP Fair Finance
Watch filed comments with regulators in Central America on General
Electric’s
proposal to buy control of BAC International Bank and export its
(subprime) consumer
finance to six more countries:
On behalf of the non-profit / NGO Inner City Press / Fair
Finance Watch
(“ICP”), this concerns the proposal by General Electric Consumer
Finance,
announced on May 12, 2005, to acquire BAC International and its
operations in your
country. We are requesting a copy of
GE’s application to your agency for regulatory approval. This letter
should be
considered an interim comment in opposition to GE’s applications. As set forth below, GE Consumer Finance is a
high-cost lender which seeks to evade regulatory scrutiny. See, e.g,
www.iinews.com/site/pdfs/IIMag_GEConsumerFinance_Nov_2004.pdf ,
including ICP’s
analysis of GE Consumer Finance’s export of predatory lending. GE’s
affiliates
are, among other things, military contractors, and have for example
been named one of the
twelve worst polluters in New York State. Its performance with Enron on
the Dabhol project
in India is shameful, as well. It is
imperative that your agency consider these issues, particularly the
sample of GE’s
WMC Mortgage Company’s lending, targeting high cost loans at Latinos,
set forth
below.
ICP specifically requests, including under the human rights laws
cited below, that
these issues be considered in connection with the regulatory approval
GE would require, as
acknowledged in its May 12, 2005, press release, which
announced that it
would acquire a 49.99
percent stake in BAC International Bank Inc. (BAC), a privately held
retail bank and
credit card issuer based in Panama City, Panama. The transaction, which
requires regulatory approvals, is expected
to close in the next few months. The terms were not disclosed. BAC is
one of the largest
banks in Central America and has been operating in the region for over
50 years. BAC has
178 branches in countries including Costa Rica, El Salvador, Guatemala,
Honduras,
Nicaragua and Panama. The new partnership between GE Consumer Finance
and BAC will enable
the two companies to deliver enhanced consumer credit products to the
growing Central
American financial services market.
ICP has obtained the 2004 U.S. mortgage lending data of GE’s
subprime / high
cost mortgage lender, WMC. The National
Mortgage News of April 26, 2004, reported that GE “has
agreed to buy WMC Mortgage... the nation's 12th largest subprime
funder... According to
figures compiled by NMN, WMC originated $8.1 billion last year... In a
statement, Mark W.
Begor, president of GE Consumer Finance-Americas, said, ‘We are
thrilled to have the
WMC team, headed by Amy Brandt, join GE Consumer Finance.’
But what is GE “thrilled” with, and what
would it be exporting? In 2004 to borrowers identified as
Hispanic and
African-American, over 65% of GE’s WMC’s loans were high cost / “rate
spread,” defined by the U.S. Federal Reserve Board as over three
percentage points
over comparable Treasury Securities on first liens, 5% on subordinate
liens. To
non-Hispanic whites, the percentage was below 53%.
This
compares unfavorably with GE WMC’s peers, and is indicative of GE
Consumer
Finance’s targeting of Latinos for higher than normal interest rate
credit.
GE’s predatory lending is not limited to the United States. See, e.g., “Office of Fair Trading Delivers
Damning Verdict on Store Cards,” Cards International, April 2, 2004. GE is under fire not only for high cost credit
cards, but also mortgages. See, e.g.,
“Mortgage Giants Faces Court Over ‘Unfair’ Loans,” Sunday
Express, May 12, 2002:
“A support group set up by an ex-teacher is
taking one of the world's largest financial companies to court in a
case that could save
millions for thousands of mortgage borrowers. The National Association
of Mortgage Victims
(NAMV) will next month ask a court to set a date to hear test cases
against US firm Ocwen
and international giant GE Capital... the terms of its loans are
unfair. Its mortgage
interest rates can be doubled if borrowers are late with payments, for
whatever reason.
High early redemption penalties are also payable.”
These are the type of predatory practices that GE has exported
to various markets,
and now seeks to export to your country. ICP has received numerous
complaints about GE,
including about its credit cards. Simply as one example:
Subj: GE Card.
Date: 9/24/03 5:25:17 PM Eastern
Daylight
Time
From: [Name available on request]
To: GE-Watch [at] fairfinancewatch.org
I
just got
burned on their overly complicated "deferred interest" scam. We
used
this GE
promotional card (recommended by my dentist) to get $5000 amount of
dental work done on my
wife. To make a long story short, the
interest
was "deferred" for a year. I worked diligently to get the balance down
to $1740
at the year end and my next bill had a $980 "deferred interest" charges
(at
21.98%). The whole thing sounds crooked to me. I
think a Mafia loan shark would have been more straight forward about
the deal...
See also, GE on pollution list, Poughkeepsie
Journal, June 30,
2005: “General Electric was designated for failing to clean up the
150,000 pounds of
PCBs its plant in Fort Edward, Washington County, dumped into the
Hudson River, said Rich
Schiafo, of Scenic Hudson. GE ‘continues to drag their feet despite the
EPA's
decision that they clean up the Hudson.’”
You
should request information from GE; ICP is
requesting a copy of all such correspondence, and is requesting a copy
of GE’s
applications, and public hearings.
Sample prior reports:
Update of March 7, 2005: In Massachusetts, EPA data
shows that a
portion of the polluted Housatonic River now undergoing a $45 million
cleanup is in danger
of recontamination with PCBs discharged by a General Electric
Update of February 7, 2005: GE’s
Jeff Immelt, speaking (or bragging) at the Advancing Enterprise 2005
conference in London
last week, said that 60% of GE's growth over the next decade will come
from the developing
world. And
that’ll be with its high-cost subprime consumer finance lending as
well...
Update
of January 10, 2005: GE continues
expanding its high cost consumer finance. In Bangkok on January 5, GE
Money Finance, an
affiliate of GE Consumer Finance Thailand, announced “plans to start
its retail bank
in Thailand in January 2006. The move is part of GE Consumer Finance's
plan to expand its
consumer lending business company
president
Piriyah Wisedjinda said in a statement. GE operates several consumer
lending business in
Thailand, ranging from auto finance services and credit cards to
personal loans” --
at high cost, we might add... Meanwhile, in Tokyo, the Japanese tax
authorities here have
alleged that a Japanese unit of GE failed to report some 3.7 bln yen of
taxable income in
the two years through December 2003, the Asahi newspaper reported. The
authorities alleged
that the Japanese branch of GE Capital International Funding (GECIF), a
subsidiary of GE
Capital Corp, tried to avoid tax by transferring some profits to GE
Capital as loan
guarantee fees...
Update
of December 6, 2004: GE brands its consumer finance in India:
General Electric
last week extended “GE Money” to India, saying that it “aims to capture
up
to Rs 10b n (Dollars 226m) in assets over the short term by selling
housing and personal
loans... GE Countrywide, a unit that mainly sold automotive loans to
sub-prime borrowers,
is being rolled into GE Money.” Meanwhile, an insurance division of
General Electric
Co. has admitted giving the giant brokerage company Marsh &
McLennan inflated quotes
— the latest company to become embroiled in a bid-rigging scandal
rocking the
insurance business.. GE informed the
Missouri
Department of Insurance, Employers Re's main regulator, the spokesman
said. And why didn’t GE tells the OTS, to which it is
applying?
Update of November 29, 2004: GE announced last week a proposal to buy Citigroup’s CitiCapital Transportation Services Group for $4.4 billion. The proposal "makes a lot of sense" because the transportation sector is one that is familiar to GE Commercial Finance and has room to grow, said GE's Commercial Finance chief executive, Mike Neal, in a prepared statement. Beyond that, he and GE wouldn’t say anything more. In May, GE Commercial Finance bought assets from Boeing Co.'s Boeing Capital Corp. and last year said it would buy Transamerica Finance Corporation's commercial lending business. A subprime lender in Australia, too!
Update of November 1, 2004: GE’s
subprime in
Australia -- GE Money president and chief executive Tom Gentile told The
Australian
Financial Review last week that GE’s primed to make more
acquisitions Down Under.
"We think Australia is a great market and we have an active business
development
function," he said. The interview
followed GE's purchase of AFIG, including the Wizard Home Loan
business, which has 230
branches in Australia, and makes GE Australia's sixth-largest mortgage
player. ANZ Banking
Group chief executive John McFarlane said GE was already a strong
competitor in the
finance area. McFarlane said ANZ would not compete with GE in the
"sub-prime"
lending market because it raised too many reputational issues. Not to GE, it doesn’t -- they just batten down
the hatches, keep everything confidential, and keep growing and growing
in subprime,
including globally...
Update of October 25, 2004: GE and the strongman: on October 21, Jeffrey Immelt announced that GE may boost its investment in Russia by $200 million. The timing was political: the YUKOS matter and anti-democratic moves using terror as a pretext have made investors jumpy, but Immelt told President Vladimir Putin it was a good time to invest, at which reporters were present. "We look optimistically at the changes you are carrying out in the country and consider it is now a good time to invest in Russia," Immelt said, adding that turnover in Russia last year had been $700 million, with profits at $50-100 million. In August, as reported below, GE jumped into the growing consumer credit market by buying DeltaBank...
Update of October 18, 2004: In
Kentucky, General
Electric has opposed a proposed air pollution control plan for the
Louisville area they
say would be too expensive and strict...
Update
of October 11, 2004: GE’s continued gaming is revealed in
documents just
obtained by ICP, after GE withdrew its frivolous request for
confidential treatment. GE’s
Dillard application states, in response to
the required question about CRA, that “[t]he FSB does not anticipate
changing its CRA
Plan as a result of the Transaction,” and then makes reference to the
FSB’s
“business plan,” which is not provided. However,
among other documents just provided by the OTS in partial response to
ICP’s FOIA
request, there is a June 8, 2004 letter from the OTS Northeast Region
director to GE,
approving (without explaining any basis) applications by GE to change
the FSB’s name
to “GE Money Bank,” and the “transfer of approximately 3,500 loan
customer
service and collections employees from affiliates of the Savings Bank
to (a) a
newly-established wholly-owned operating subsidiary of the Savings Bank
called GEMB
Servicing Company, Inc. and (b) an existing wholly-owned operating
subsidiary of the
Savings Bank called GE Home Finance, Inc.”
GE and the OTS between
them are designing
more and more loopholes to the CRA, deeming the Savings Bank owned by
the world’s
largest corporation (by market capitalization), a thrift engaged in
home finance, through
operating subsidiaries and otherwise, an exemption from CRA’s lending
test. The twisting and evisceration of
CRA, and the lack
of transparency, are outrageous, and contrary to the letter and spirit
of the CRA. ICP is preparing additional
comments, while
awaiting the OTS’ continuing response to its FOIA request.
Update
of October 4, 2004: While GE
Capital and its lawyers play hide-the-ball
on their Dillard National Bank application, the Irish Independent of
September 27 reported
on GE’s export of subprime lending: “GE CAPITAL has further
advanced its
quest to become a major provider of consumer finance in the Irish
market, through a tie-up
with Ireland's largest general insurer, Hibernian Insurance. The
insurance group is set to
begin providing unsecured personal loans through its direct
distribution channel.
Hibernian Direct embraces the group's 33 branches around the country
and its internet
sales channel. GE, already a leading
provider
of car finance and a 50pc shareholder in mortgage wholesaler Mortgage
Business Solutions,
moved into the consumer finance market over the past couple of years,
and had done deals
with other financial service companies owning strong brands and their
own distribution.
Hibernian has also been gradually expanding the product offering
available to its
extensive customer network outside of its core insurance products. The
addition of
unsecured personal loans is just the latest step on the way to offering
customers a wider
financial choice... Kieran Holland, director of consumer finance at GE
Capital, sees this
linking of finance and insurance as "opening up exciting opportunities"
for both
companies. The companies have a modest enough Euro 50m loan target in
year one.
“For GE, this is the fourth personal
finance transaction it has done with major brand distributors. Most
recently, it tied down
a deal with the EBS and has been providing funding to One Direct, the
An Post subsidiary,
for its personal loan product for close on two years. Both arrangements
are said to be
working well. GE is also providing personal finance to Ryanair and is
understood to be
looking at other link-ups in this area. The terms of the Hibernian
loans are similar to
those being offered by One Direct, but come in a little dearer than the
EBS's.”
Yeah,
GE Capital: “a little dearer”...
Update
of September 27, 2004:
ICP’s filings with the OTS and FDIC have both been acknowledged.
While
awaiting the timely-requested applications, ICP notes that
Update
of September 20, 2004: ICP has filed
preliminary comments and requests,
about the GE - Dillard proposal, with the Office of Thrift Supervision
and FDIC...
Update of August 23, 2004: GE Consumer Finance is described as the largest issuer of commercial paper in the world in a March 18 report from Standard & Poor's. Total CP to debt declined to 26% at year-end 2003, from 48% at year-end 2001, according to the S&P report. Analysts said GE Capital generally funded credit card receivables through its Edison Funding conduit, a multiseller asset-backed commercial paper program rated A1+' by S&P and P-1' by Moody's Investors Service. As of Nov. 30, the most recent measure available from Moody's, the program had $21.7 billion outstanding, of which 17% came from consumer credit cards, according to Moody's. But GE Capital is interested in the term market. And everything else -- including subprime consumer finance lending in Malaysia, according to GE president for South-East Asia, Stuart L. Dean. "We love this business. We want to be a major player (in Malaysia), (so) we don't even cap it. Malaysia provides us a stable environment to invest in. It boils down to finding the right partner and whether the business model makes sense," Dean told the local Business Times. "We've had several meetings with Bank Negara Malaysia officials and it is progressing well. There are no show-stoppers at the moment," he said. Soon enough... Until next time, for or with more information, contact