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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 September 24, 2012

    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; "GE Plans to Move Into a Risky Area: World of Unsecured Personal Loans," Wall Street Journal, May 9, 2003, Pg. A3.   ICP's protest, which requests a public hearing and is summarized below on this page, focuses on Community Reinvestment Act issues.   GE's Ohio-based savings bank, GE Capital Consumer Card Co. ("GECCCC") has sought to limit its CRA responsibilities by claiming it only makes credit card loans, and is therefore a "limited purpose institutions" for CRA purposes.  But now it seeks to acquire and engage in real estate-secured home improvement lending; it must, ICP contends, substantially modify and expand its CRA program.  Also, GE Capital is entering various fields of consumer finance, including direct mailing offers of high rate consumer loans. 

    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 September 24, 2012: Back in April, Inner City Press / Fair Finance Watch filed comments with the FDIC opposing GE - MetLife bank. Now there's this, from SNL Financial:

"GE Capital Retail Bank, a unit of General Electric Co., will acquire approximately $7 billion in deposits from MetLife Bank NA, rather than GE Capital Bank. According to a Form 8-K filed Sept. 21, most key terms of the 2011 agreement remain unchanged. However, the amended transaction will be subject to regulatory approval by the OCC, and approval by the FDIC will no longer be needed. Upon completion of the sale, MetLife Bank will terminate its deposit insurance and MetLife Inc. will deregister as a bank holding company."

This is a scam. We'd hope to hear about it from Tom Hoenig of the FDIC, for example.

Update of September 17, 2012: GE's proposed acquisition of the deposits of MetLife Bank, which ICP protested months ago, remains unapproved by the FDIC. Some are saying that, unlike other applications, it requires action by the FDIC board. We'll see.

Update of June 11, 2012: So the FDIC, even after the subprime meltdown, rules that GE Capital Financial Inc, buying the deposits of MetLife Bank, is NOT responsible for the predatory lending of WMC, because it "was a subsidiary of a different financial institution (GE Capital Retail Bank)." This hairsplitting is shameful -- and dangerous. Watch this site.

Update of April 2, 2012: The acquisition of MetLife's deposits by General Electric, has proceeded stealthly with the Office of the Comptroller of the Currency belatedly stating that it plays no role in the review since GE is using a Utah-based "non-bank bank." These loopholes, like GE, played a role in the subprime meltdown.

Update of January 23, 2012: General Electric, which engaged in predatory lending through WMC, is now reportedly under investigation -- just as it proposes to acquire $7.5 billion in deposits from Met Life.

Update of January 2, 2012: Most coverage has focused on MetLife's reasons for moving to sell deposits. But what about GE's motives for buying, and how that process will go? We'll be there - watch this site.

Update of June 14, 2010: Citigroup is looking to sell its $50 billion portfolio of retailers' credit card loans. Listed as a possible (but we'll say unlikely) buyer: GE Money

Update of June 7, 2010 -- Bloomberg reports that GE Money is growing in subprime in the UK....

Update of November 17, 2008: Global fragment of the predatory lending meltdown -- General Electric left Japan but did not go far, having re-established a subprime beachhead in Taiwan. And while GE claims loudly it is not interested in becoming a bank holding company, some feel "thou dost protest too much." We'll see.

Update of October 27, 2008:  So GE has signed up for the Fed's commercial paper program. It's evasions of the CRA, or limitations to a single credit card bank and Utah industrial loan company, should end...

Update of September 8, 2008: GE said it received a Wells notice that staffers at the Securities and Exchange Commission are considering recommending the SEC file civil charges in a long-running probe of GE's accounting. GE said Friday that the SEC staff is considering civil charges on its accounting for four items over various periods: derivatives; sales of spare parts, particularly in its aviation unit; the timing of revenue recognition on the sales of locomotives; and revenue recognition on several other items.

  What about subprime?

Update of September 1, 2008: GE Money narrowly avoided serious legal action when it agreed to an unprecedented enforceable undertaking with the Australian Securities and Investments Commission in May. As part of the undertaking, the company agreed to a review of how it deals with customers who are behind in their repayments. The first confidential report on the company's practices was handed to ASIC on Friday. GE Money has already agreed to compensate at least 2000 customers for intimidating tactics, which included ensuring debts were paid by urging staff to repeatedly phone or send letters to borrowers. So far no customer has received compensation.

Update of August 25, 2008: Genpact Ltd.,  a business process outsourcing provider with its Latin American headquarters in Juarez, has acquired a delivery center in Guatemala City, the company announced this week. Genpact  will provide services to GE Money from the facility, which it acquired from GE Money, a division of General Electric. Financial details were not disclosed. The Guatemala facility extends Genpact 's Latin American presence beyond Mexico, the company said in a news release. The delivery center will initially employ more than 700 people, and can grow to 2,000 workers, it said.

Update of August 11, 2008: In Ireland, "GE Money  is to make 85 staff redundant and stop offering personal and commercial loans, in a major restructuring of its operations in Ireland. The lender, which is part of America's largest company General Electric,  is to continue offering sub-prime loans, loan protection insurance, and car finance through motor dealers." The subprime continues...

Update of August 4, 2008: GE is getting out of mortgages in Canada, while expanding elsewhere. Apparently Canada is too regulated for GE...

Update of July 28, 2008:  Is GE ramping up for predatory ending in the United Arab Emirates? Ecomagination first -- according to DJN, in "the $8 billion dollar co-investment fund set up by Mubadala Investment Corp. and General Electric Co. (GE) are some significant commitments from G.E. for Mubadala's various Masdar clean technology initiatives. As part of the agreement announced on Tuesday, G.E. will invest $50 million in the second Masdar Clean Tech Fund. The Fairfield, Conn.-based entertainment, financial services, and industrial conglomerate will also be developing what it called an "ecomagination" center to be based in Masdar City, a zero-emission city, which Masdar is building in Abu Dhabi."

Update of July 21, 2008: GE Money is still a major forecloser in Ireland, drawing the ire of the Financial Regulator there "on their repossessions policies, to ensure they treat homeowners who fall behind on their repayments fairly."

  And in Australia, "at least 2000 customers owed compensation by the nation's biggest consumer credit provider, GE Money, are still awaiting payment for harassment by the company's debt collection department. GE Money agreed to pay them as part of a deal with the Australian Securities and Investments Commission, which found staff had used high-pressure tactics to intimidate customers into making up for missed credit card and car-finance payments. But nearly two months after it signed an unprecedented enforceable undertaking with ASIC, GE Money spokesman Geoff Lynch said he was still unsure when it will be ready to make the first payments to victims, some of whom first complained to ASIC four years ago."

Update of July 14, 2008: After GE's sell-off of Lake to Shinsei in Japan, where will the $5.4 billion be redeployed -- in predatory lending elsewhere? "In an extremely challenging environment, we have completed an agreement that fully meets our core strategic objectives: giving our Japanese business the opportunity to work with a partner committed to investing in Japan, and allowing GE Money  and GE to redeploy its capital to areas which will generate strong sustainable long-term growth and returns for our shareowners,'' said GE Money's CEO Bill Carey said-in-a-statement...

Update of July 7, 2008:  GE Money CareCredit provides this testimonial from Laser Elite, a hair and skin clinic in McLean, Va.: "Having CareCredit has definitely had a positive impact on our business. It helps us attract more patients and has increased our sales by 25 percent." GE's website for its CareCredit card lists endorsements from 31 state medical and veterinary associations and 11 national groups, including the American Dental Association, American College of Eye Surgeons, American Society of Plastic Surgeons, American Society of Bariatric Physicians, and American Animal Hospital Association. Like we've said before, pet loans. But how does GE collect?

Update of June 30, 2008: GE is trying to sell off its credit cards, but nobody is interested......

Update of June 23, 2008: The State Bank of Vietnam has announced that it has allowed GE Money, to start operating in the country. "The SBV has issued a license to establish GE Money Vietnam Finance Co. Ltd, or GEMVF, with its office in Ho Chi Minh City," the SBV said in a statement published on its Web site.  GEMVF, which has a 50-year license, will have a registered capital of $18.2 million, it said. The company will be permitted to issue bills and bonds, issue credit cards and provide loans in Vietnam, the SBV said.  GEMVF will be the fourth foreign financial firm to operate in Vietnam. The other firms are owned by U.K.'s Prudential Insurance, France's Societe Generale and Czech's PPF Group. From GE, watch out for predatory lending...

Update of June 9, 2008:  Polish financial regulatory body KNF has rubber-stamped GE Money's takeover of Bank BPH. 'KNF has approved for GE to use their rights from over 66 percent of votes but not more than 75 percent of votes in BPH,' said Lukasz Dajnowicz. BPH was Poland's third largest bank until the bulk of its assets were absorbed by peer Bank Pekao as part of a merger of UniCredit's local units. Italy's UniCredit last November agreed to spin off and sell 200 branches of BPH to GE Money to gain Polish authorities' approval for a merger of its local units...

   GE Money's head of global communications Robert Rendine says that GE Money, which provided about $25 billion of the parent's company's $172.7 billion in sales last year, is an active player in the global financial services sector.  While the economy in the United States has struggled, GE has turned to developing markets like Poland, Turkey and India, Rendine says. GE Money has invested nearly a half-a-billion dollars in some of these emerging markets, "and they have become a great growth vehicle for us," he adds.

 Yeah - a great vehicle for spreading predatory lending...

Update of June 2, 2008: GE, advised by JP Morgan Chase, beat out Natixis and others to buy Interbanca from Santander -- what GE is doing is trading other businesses with Santander, giving it GE Money's businesses in Germany, Finland, and Austria, and its card and auto businesses in the UK.

Update of May 26, 2008: GE Money's predatory lending, insurance sales and debt collection practice have hit a new low in Australia. Beyond called debtors up to 100 times a month, GE violated previous commitments. According to the Australian Securities and Investments Commission (ASIC), it "has taken action over the sales and debt collection practices of companies in the GE Money group. ASIC has imposed conditions on the Australian financial services license (AFSL) of GE Money's Hallmark General Insurance Company Ltd  and Hallmark Life Insurance Company Ltd after those companies failed to comply with commitments each made in a 2006 Enforceable Undertaking (EU) to ASIC. ASIC found that parts of the insurance advice and sales business were often poorly managed and not meeting the legal obligation requiring there be a 'reasonable basis' for personal advice given to customers. Specifically, ASIC was concerned that staff were selling insurance to customers whose needs had not been identified or understood. Given that the Hallmark companies did not comply with a number of key undertakings given to ASIC in 2006, the regulator has decided the best way to protect consumers is to impose conditions on the AFSLs of GE Money's Hallmark companies.

   The more stringent conditions now included in the AFSLs of the GE Money's Hallmark companies replace the 2006 EU. These additional license conditions require the Hallmark companies;- to engage an independent expert, over a period of up to 15 months, to review and assess the advice, sales, training, management and corporate governance processes in its branch network and make recommendations to correct any deficiencies to ensure these processes are at an industry best practice level;- to engage the same expert to assess the steps already taken by the Hallmark companies to compensate their customers and make recommendations as to any additional compensation steps that may be necessary;- if the expert makes recommendations, to provide ASIC with an Action Plan to implement those recommendations; and- to provide ASIC with full details of the compensation already paid to customers by means of a director's statutory declaration, by 18 July 2008.

    Furthermore, the Hallmark companies are now required to limit the insurance advice their staff provide to 'general advice' only and not 'personal advice'.

   Separate to the imposition of additional license conditions on the Hallmark companies, GE Money has entered into an EU to address ASIC's concerns about the debt collection practices of its consumer credit business. This is in response to consumer complaints about harassment from the debt collection practices of that business. Those practices included excessive or inappropriate contact with customers, contact at unreasonable hours and an inflexible approach to repayment arrangements.

   As part of this EU, the GE Money consumer credit business is required:- to engage an independent expert, over a period of two years, to review and assess its debt collection processes to ensure that it complies with the ASIC/ACCC Debt Collection Guidelines and make recommendations to correct any deficiencies;- if the expert makes recommendations for improvements, to provide ASIC with an Action Plan to implement those recommendations;- to pay compensation to affected customers in accordance with guidelines prepared by the Banking and Financial Services Ombudsman; and- to arrange and pay for an industry workshop to promote best practice in the debt collection industry.

Update of May 19, 2008: The several thousand people working at General Electric's Appliance Park in Kentucky were blind-sided by the company's plans to sell or spin off its appliance business. Larry Hayes, secretary of Kentucky Gov. Steve Beshear's executive cabinet said, "It's the hand we've been dealt, and now we need to play that hand as best we can."

  "We don't have any idea who's coming in, what kind of salaries, how much of our benefits we're going to lose," said Ann Davidson, a production worker with 35 years at GE plants.  We bring good things to life??

Update of May 12, 2008:  GE Money in Sweden -- "The first foreign bank in Sweden was established in 1986, with the first branch opening four years later. Most of the 29 foreign banks (at end-2006) focus their activities on the corporate banking and securities markets. The largest foreign bank (aside from the Nordea Group) is Danske Bank, now established as the country's fifth-largest bank. A fairly recent foreign entrant is Kaupthing (Iceland), which took over JP Nordiska in 2002. The most active non-Nordic banks are GE Money Bank (US), Dexia Credit (France/Belgium) and ABN Amro" -- which bet on world food prices rising...

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, 2007GE 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.

  This has now been raised to the OTS Director and the agency’s ombudsman; we’ll see.

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 and other matters, ICP cites 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 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 protected classes 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.  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.

           Until next time, for or with more information, contact us.

  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 plant. Until next time, for or with more information, contact us.

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 General Electric just settled charges with the SEC that it failed to "fully describe" details of former CEO Welch’s decadent employment and post-retirement consulting agreement. GE consented to the "entry of an order that it cease and desist from violating the proxy solicitation and periodic reporting provisions of the federal securities law."  The GE proxies said Mr. Welch's agreement called for him to receive "for the remainder of his life, continued access to [GE] facilities and services comparable to those provided to him prior to his retirement." The SEC said GE didn't provide "specific information about the 'facilities and services' Welch would receive in retirement."  And they are extensive, and paid for in part by predatory lending. Developing...

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...Until next time, for or with more information, contact us.

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 us.

Update of August 16, 2004: On August 11, GE confirmed a proposal to acquire DeltaBank, a consumer bank and issuer of Visa Cards in Russia. "Terms of the deal were not disclosed." Also last week, GE Consumer Finance announced a proposal to buy the card business of U.S. retailer Dillard for $1.25 billion. It's perhaps a time to review GE's rush into subprime, with WMC, Conseco / Mill Creek, live checks, FlexPlus and who knows what else. Ensconced in Stamford, Connecticut, GE Consumer Finance’s president Mark W. Begor told reporters, "We do focus on growth." GE Consumer Finance is opaque: GE wants to be in subprime, but not use that word, and not b e involved in any of the dialogue about improving practices in the sector. It’s a strategy the end of which is near...

Update of August 9, 2004: GE Consumer Finance agreed Monday, Aug. 2, to acquire a 38% stake in South Korea's Hyundai Capital Services Inc. for $859 million.... Until next time, for or with more information, contact us.

Update of July 26, 2004: GE Capital is rumored to be one of the two main hunters (the other is Citigroup) seeking to acquire Cendant Mortgage Corp... Hats off to the FT’s reporting last week on "IGE USA Investments, a holding company for many UK activities of General Electric of the US. As well as industrial interests, this includes operations of GE's financial arm, GE Capital. IGE USA has an ostensibly weak balance sheet. The net asset value of Pounds 2.1bn is dwarfed by net amounts owing to the rest of the GE group of Pounds 4.4bn - not unusual for a conglomerate with a big financial subsidiary, since financial operations tend to involve substantial borrowings. The more important point concerns the revenue account. In 2002 IGE USA earned a pre-interest profit of Pounds 183m on turnover of Pounds 4.4bn. Yet this tips over into a loss of Pounds 57m after a charge for net interest that includes Pounds 246m payable to group companies. IGE then declares a modest after-tax profit thanks to a tax credit of Pounds 73m, while carrying forward an astonishingly large loss of Pounds 672m accumulated over the years..

Update of July 19, 2004: "No company spends more on lobbying than GE, according to PoliticalMoneyLine.com -- $7.54 million last year alone. Its political action committee, through which it donates to congressional candidates, ranks in total donations among the top 10 of all corporations this year" (from Washington Post, July 13, 2004).

  GE gets corporate welfare not only in the United States, but also in Central Europe: the European Commission announced July 14 it has decided to launch formal investigation into government aid to Czech bank Agrobanka and its owner GE Capital. The EC said the government's duties were not clearly defined in case GE Capital decided to exercise a put option agreed with the government. "The ultimate financial exposure of the Czech state is not sufficiently defined at the date of accession. The measures are therefore deemed still 'applicable after' accession," the EC said. The EC considers the guarantees, damages and put option as state aid and is examining whether this can be approved in line with the rules for rescue and restructuring. The investigations will focus on the government's promise to cover damages GE Capital could suffer due to lawsuits. The EC will also probe into the part of the purchase contract that could force the Czech government to buy back part of Agrobanka's assets. "GE believes that such damages are an integral part of any common business deal. The European Commission wants to check this and get more information about these measures," GE Capital Bank spokeswoman Eva Chaloupkova said (or spun)..

Update of July 5, 2004: GE and (diplomatic) evictions in Melbourne: Nauruan government officials were looking for a new home last night after being evicted from their Melbourne landmark building, Nauru House. The evictions are the latest round in an attempt by US financier GE Capital to reclaim a $240 million loan to Nauru that the island's new Government is desperately trying to refinance. About 30 staff of Nauruan departments based in Melbourne were told to leave the building by 5 pm, despite their earlier hopes a court injunction might prevent their eviction. Nauru House, Melbourne's first skyscraper, was funded by the proceeds of the island's rich stores of phosphate -- or accumulated bird droppings. The building is one of five Australian properties owned by the Nauru Phosphate Royalties Trust, which GE Capital placed in receivership last month. One Sydney building has already been sold, and Nauru House is being prepared for sale to repay some of the island's debt to GE Capital. Receivers PPB say the Nauruan tenants have no leases and have not paid rent. PPB has already seized the 51st-floor penthouse of Nauru House, used for accommodation by visiting Nauruan officials, including the president. At 4.30 pm on July 2, staff were moving records from the 49th floor office up to the 50th floor, where other staff, including the island's Chief Justice, are based. If no deal is brokered, the staff on the 50th floor are likely to be ordered to leave next Friday.

Update of June 28, 2004: In Thailiand, GE Capital is in talks with various finance companies, including Siam Industrial Credit Plc (SICCO), to explore acquisition possibilities. "We are looking at certain options as there are lots of opportunities that have emerged from the ongoing changes in the financial sector," said GE Consumer Finance in Asia president Ridha Wirakunsumah. Watching out for GE's high-cost subprime lending... GE Capital's sell-off of Nauru's assets continues. The receivers of the Nauru Phosphate Royalties Trust have sold the Mercure Hotel on Broadway in Sydney for $80.5 million to the Schwartz family after a last minute legal challenge to the sale. Sources close to the trust said the net price was about $78.3 million, taking into account a clawback arrangement with the hotel manager, Accor. The hotel was one of five Nauruan-owned properties in Sydney and Melbourne to which PPB has been appointed receivers for by GE Capital. Another take on the background: when Nauru a $160 million mortgage in 1998 for its real estate holdings in Australia, it turned to GE Capital. In January, Nauru's Government defaulted on the loan. And in April, General Electric's real-estate unit asked receivers to sell Nauru's Australian shopping center, office building and hotels. They are worth an estimated $200 million ( $317 million) - the most valuable asset for the island's 12,000 residents. The 21 square-kilometer island remains on the OECD's money-laundering blacklist after issuing 400 overseas banking licenses in the mid-1990s. Nauru's financial crisis could become a regional security issue, says Steve Vickers, president of International Risk, a Hong Kong-based consulting firm. "Failed states become used by terrorists and criminals," he says. "When countries are desperate, they will do desperate things. "The Russian Mafia laundered billions through Nauru in the 1990s, says Hughes, now a senior fellow at the Center for Independent Studies, a Sydney-based research group. Even PPB Group, the Sydney-based receiver appointed to sell the properties by General Electric, is proceeding "cautiously", says Steve Parbery, a partner. "Nauru has a history of engaging with agents of curious background and credibility," he says. The situation is complicated by a political crisis. Nauru's 18-member Parliament has been stalemated since March, when the Speaker defected to the Opposition. That gave pro and anti-Government forces nine votes each. Since then, no Budget bill has been passed. The island is unlikely to gain refinancing for Nauru's Australian properties. Asian Development Bank estimates show the properties are mortgaged to 83 per cent of their value. The interest rate agreed was 8.985 per cent over five years, with General Electric also receiving 20 per cent of the increased value of the properties - $12 million on top of the principal. An Asian Development Bank report in April described the properties as "relatively expensively mortgaged." Yep...

Update of June 14, 2004: Carrying high-rate consumer finance into Russia: the newspaper Vedomosti reported last week that GE Capital plans to start operations in Moscow by year-end, led in Moscow by James Cook, former head of Delta Capital Management fund and Delta Credit bank. GE Capital plans to offer "consumer loans"...

Update of June 7, 2004: GE Capital's forced sell-off of Nauru's assets continues: Nauru's Downtowner Motel in suburban Melbourne is set to go on the block for about $12 million. Melbourne's Savoy Park Plaza Hotel and the landmark Nauru House will be put up for sale shortly, according to receiver PPB. PPB was appointed to take control of the portfolio in April by GE Capital, which is owed $239 million by Nauru. PPB receiver Mark Robinson said he was yet to ask for sales submissions for the Savoy and Nauru House. "The entire portfolio will be sold, but it's more a case of where they fit in the timeline," he said. "We are not too far away from obtaining valuations." Sources said that there was some prospect of refinancing Nauru's debt but GE Capital was reluctant to consider proposals as it wanted to be in control of the process....

Update of May 3, 2004: GE confirmed its aggressive expansion of subprime, with its announced plan to acquire questionable subprime lender WMC Finance Co. of Woodland Hills, Calif.. We'll have more on this...

Update of April 26, 2004: The GE Capital and Nauru scandal continues, barely covered in the U.S. press. GE Capital, has a $236 million loan to the Nauru Phosphate Royalties Trust . It called in receiver PPB to the landmark Nauru House in Melbourne and other properties on Friday after months of negotiations. Nauruan president Rene Harris said on April 20 that the trust's facility with GE Capital had expired on January 4 and, because of "internal issues", Nauru had been unable to refinance. Developing...

Update of April 19, 2004: GE Capital, it turns out, is a major lender to, and now forecloser on, the island republic of Nauru, most known in recent years for money laundering. The Nauru government's Australian spokeswoman Helen Bogden said receivers had been appointed to the Nauru House Property Trust. They had taken control of Nauru Trust properties in Australia, including a Melbourne high-rise called Nauru House, Sydney's Mercure Hotel and Royal Randwick Shopping Center, and the Downtowner and Savoy Park Plaza hotels in Melbourne, Bogden said. The country of 12,500 people owes around $169 million to GE Capital, which has a mortgage over Nauru's Australian property investments. Bogden said GE Capital had lent money to the trust in relation to the properties and was seeking to have it recovered. "There are still negotiations going on between the Nauru government and the receivers. Until Monday we won't have any further details," Bogden said. She refused to say whether Nauru would ask for Australian help to solve the crisis. Canberra has already indicated it was unwilling to step in because the issue is a commercial one. "The Australian government has consistently told Nauru that sound economic management and good governance is essential," a foreign affairs spokeswoman said Friday. A Nauru opposition political newsletter published this week said the country faced foreclosure by May 5 after failing to meet several other deadlines....

Update of April 12, 2004: Always on the make: General Electric's Real Estate unit announced plans on April 6 to buy U.K. firm Benchmark Group for about $824 million. The announcement quoted GE Capital Europe President Charles Alexander gushing that "We are excited by the opportunity this acquisition represents to increase our direct investment in UK property. " GE Capital is already the dominant high-rate store credit card lender, and a major predatory lender, in the UK...

Update of March 29, 2004: Among GE Capital's contributions to predatory lending in Thailand is its refusal to report positive credit histories: GE Capital (Thailand) only shares some of its customer information with Central Credit Information Services Co...

Update of March 22, 2004: Business before consumer subprime: the Chinese Ministry of Commerce approved GE Capital to provide equipment leasing services in China late last month, an assistant to the general manager of GE Capital, surnamed Zhang, told AFX last week.. GE will offer various equipment leasing services for medical instruments, aircraft engines and construction equipment in the local China market, Zhang added. "However, all these services will not be provided to (private) individuals. GE Capital only targets government institutions, companies and various organizations at present," Zhang said GE Capital is the first foreign-funded company to receive an equipment leasing license in China....

Update of March 15, 2004: in Bangkok on March 9, GE Capital (Thailand) Ltd., said it anticipates its loan portfolio to grow by 20 percent this year from approximately 88 billion baht in 2003 due to continued economic growth. The company's President Piriyah Wisedjinda told reporters that GE Capital posted 40 percent growth last year due to a consumer-spending bonanza on a wave of robust economic growth... It's also, we note, attributable to GE's role in the globalization of predatory lending...

Update of March 8, 2004: The GE Capital intrigue this week is in Malaysia, where the local business press predicts that GE will buy a controlling stake of credit card issuer MBf Holdings Bhd... 

Update of March 1, 2004: ah, globalization. Just as the General Accounting Office has confirmed that the secondary market can enable predatory lending, General Electric is lobbying China's big banks to buy more bonds issued by GE Capital and it sees a strong appetite for the debt in Asia, a senior GE executive said. Kathryn Cassidy, vice president and treasurer, told reporters the company is promoting the sale of its debt to several mainland banks with large foreign exchange holdings.
"We are meeting with fixed-income investors who have bought our bonds and will hopefully in the future continue to buy GE Capital bonds with their foreign exchange," said Cassidy. The GE official said that five or six large (but unnamed) mainland bank have bought or expressed interest in GE bonds in the past... In England, GE Capital is bidding for Benchmark, a property group...

Update of February 23, 2004: GE's Central European subprime lending is not limited to the Czech Republic -- GE also owns over 99% of Bank of Budapest (the Hungarian News Agency puts the figure at 99.26%, through GE Capital International Financing Co )...

Update of February 16, 2004: GE Capital Multiservis, the largest "hire-purchaser" on the Czech market, last year saw the volume of loans granted up by 22 pct to a record Kc6.4bn, CEO Jiri Pathy told reporters on Feb. 11, adding it proves an ever greater popularity of buying goods on hire purchase with the Czech population. Among the firm's main rivals, Home Credit Finance last year provided loans worth Kc5.2bn, Cetelem CR granted loans to the extent of Kc4.7bn and CCB Finance provided Kc500m worth of loans. Over the past three years, 44 pct of households took advantage of hire purchase services and almost one-third of the population is reported to consider using the service in the future." Great... 

Update of February 9, 2004: A Feb. 2 Evening Standard article about store credit cards reports that "there are 20 million cards issued, with an average interest rate of 27 per cent. US-owned GE Capital Bank, which made a pretax profit of £187 million in 2002, is behind about half of them"... According to Access Czech Republic Business Bulletin of February 4, 2004, GE Capital Multiservis was the number one Czech installment lender in 2003; it was in the top three in mortgages. And all at high rates...

Update of February 2, 2004: GE Capital Woodchester has been accused of age discrimination in credit-granting in Ireland...

Update of January 26, 2004: The GE (Capital) story of the week was the announcement that GE will seek to sell-off 30% of its insurance business, via an IPO. They'll call it Genworth -- not being sold, it appears, is GE's growing U.S. subprime lending business...

Update of January 20, 2004: GE's predatory lending resulted in fines on two continents last week -- why not in North America (yet)? GE's consumer finance operations, bought from AVCO, has recently been fined $3.25 million for failing to comply with consumer credit laws; the New South Wales portion of the fine is $1.91 million. Like Citigroup tried to lay off its predatory lending settlement with the FTC as being with "Associates," GE still hides behind the name of AVCO, which it acquired in 1999... In London, GE Consumer Finance on Jan. 15 was found in breach of consumer law and ordered by the Office of Fair Trading to reform its policy of issuing Debenhams and Harrods customers with unsolicited credit cards...

Update of January 12, 2004: in a final spin-cycle on its subprime loans, GE Capital Woodchester in the U.K. is selling a portfolio of defaulted car loans to Aktiv Kapital, a Scandinavian company that specializes in collecting or suing on defaulted loans. It's all part of GE's business -- one that GE is increasingly bring (back) to the U.S. (now with kiosks, and high-cost pseudo-bank accounts -- more on this as it develops). The U.K. deal is not the first time GE Capital Woodchester has sold on non-performing loans to the Norwegian company. During the period from July 2002 to August 2003, Aktiv Kapital purchased similar portfolios from GE in the Irish Republic...

Update of January 5, 2004: reflective of GE's commitment to communities, GE Capital Equipment Finance in the United Kingdom has announced it is fleeing from center-city Bristol. GE Capital spokeswoman Stephanie Rennie said the firm believed it had a "moral responsibility" -- to look after staff. She said she would not disclose percentages but staff revealed a "significant concern" which led to the management deciding to start looking for an out-of-town site. She said: "We take very seriously the issue of safety among our employees. We felt we had a moral duty to ask them about the problem and take the appropriate action." Ah, commitment to communities...

Update of December 29, 2003: In Melbourne on Dec. 22, dubious debt collector Repcol announced an agreement to purchase 25 per cent of future written-off consumer debts from GE Capital Finance Australasia for a six month period. Repcol managing director Peter di Prinzio said the forward flow purchase marked a new milestone in the relationship between the two companies. Yep...

Update of December 22, 2003: while its abuse of consumer continues unabated, GE also expands, mostly outside of the U.S.. On Dec. 19 in Singapore, GE Consumer Finance Friday said it has agreed to buy Singapore used auto finance company Orient Consumer Credit Pte. Ltd.... also on Dec. 19, GE confirmed it's proposing to buy Royal Saint Georges Banque in France... Meanwhile, here's a sample of GE's practices, from the U.S.:

Subj: Complaint RE: GE Credit Card

Date: 12/18/03 12:06:34 PM Eastern Standard Time

From: [ ]

To: GE-Watch [at] innercitypress.org

I'm writing to add my voice to the chorus of complaints about the deceptive practices of GE Credit Card Services, in this case, issued through Monogram Bank of Georgia on behalf of Tweeter, etc.

Long story short: I made a purchase at the store, took advantage of the 0% option by opening an instant credit card, made my payments faithfully and on-time electronically. Never late once. When it came time to make the final payoff I inadvertently clicked the wrong button on my online banking panel and send the total amount to the wrong lender. Realizing my mistake a week later, I called GE Credit, but they refused to waive either the late fee or the interest, even though they had ample evidence (from my attempt to make the final payoff on time, albeit to the wrong vendor) that I had attempted to honor their terms and that this was an honest mistake.

Instead, they hit me with over $330 worth of finance charges on an $800 purchase, not only defeating the purpose of the 0% offer, but engendering no goodwill towards Tweeter, the shop where I purchased the home theater gear in the first place. Not only that, but they continue to hound me for additional interest and late fees, claiming that "you signed the agreement." Ironically, they play holiday music while they leave callers in limbo on hold in a vain attempt to get anywhere by speaking with a supervisor. Who, by the way, plays the same broken record: "You signed the agreement." So basically, if I don't pay the additional interest, GE Capital is going to send me to a collection agency and potentially tarnish the excellent credit which my wife and I have spent years building up.... Thanks for getting the word out.

   We'll continue to do so. Until next time, for or with more information, contact us.

Update of December 15, 2003: GE introduces the predicate for predatory lending into the Czech Republic: the Czech News Agency of December 11, 2003, report that "some Czech banks are getting ready to grant mortgage loans for the purchase of consumer goods, allowed by a law due to take effect next May, CTK learnt in a poll today. The rules for borrowing against homes are part of an amended law on bonds, now under discussion in parliament, which is to come into force as of Czech accession to the EU in May 2004. 'The mortgage loan can be used for the purchase of a car, but it must be secured with real estate. This is similar to the so- called American mortgage,' said Tomas Nemecek of the Finance Ministry. Zivnostenska banka and GE Capital Bank said they were planning mortgage loans for consumer goods." Great...

Update of December 8, 2003: From the Pensacola (Fla) News Journal of December 5, this account of GE Capital's bungling:

"A former financial services executive testified Thursday that he dropped plans to provide $90 million to finance a cement plant in Suwannee County because of what he read in an abbreviated version of a Pensacola News Journal article. Bill Lockhart of Marietta, Ga., a former GE Capital executive, said the shortened version of the story obtained from the LexisNexis research service in 1999 suggested that road contractor Joe Anderson Jr. had murdered his wife 10 years before, so Anderson was inappropriate to deal with. "I was blown away by it," he said of the information. He said he ordered the entire article from the News Journal. Only then, he said, did he learn that the shooting was an accident, but he did not re-institute his financing plans. "I think the damage was done. It was just devastating," he said.... News Journal lawyer Bob Kerrigan challenged Lockhart's credibility in a stinging cross-examination. Kerrigan noted that News Journal articles from 1998 were not available on the LexisNexis database."

Until next time, for or with more information, contact us.

Update of December 1, 2003: over Thanksgiving, in Korea and France, GE Capital continued its hunting of consumer finance: a ranking GE Korea official essentially confirmed a local daily's report that GE is considering an acquisition of debt-ridden LG Card, the nation's largest credit issuer. The Chosun Ilbo reported Friday that the local arm of the global electric giant was consulting with its parent company on the acquisition of LG Card. About the report, Lee Hyun-seung, a GE Korea executive director, said to Yonhap News Agency, "What we can tell you is we've never made contact with LG Card creditors, but it's true we have long been interested in the Korean credit card market." (Asia Pulse). Meanwhile, Abbey National said on Nov. 28 it is in advanced talks with GE to sell part of its French business, mortgage lender Royal St Georges Banque...

Update of November 24, 2003: the president of GE Capital Europe, Charles Alexander, last week pontificated to delegates to the Confederation of British Industry's conference in Birmingham that Britain's entry to the euro would have no impact on his company's decision to invest in the UK. He said far more important criteria for business investment include things such as economic stability, labor market flexibility and whether there is a "culture of business" in the country. Given GE's actions through First Nationwide and i Group, the lack of effective anti-predatory lending legislation seems to make the UK attractive to GE Capital as well...

Update of November 17, 2003: round and round the mulberry bush with GE Capital and its subprime lending. In 2001 in the UK, GE bought igroup, a controversial subprime lender, for 200 million pounds. Soon thereafter, GE "admitted it is in regular contact with the Office of Fair Trading, the FSA and the Mortgage Code Compliance Board over its sub-prime lending subsidiary igroup... GE also acknowledged that igroup - and therefore GE - has an option to buy Cornwall broker The Mortgage Group, which was accused in January in a BBC Panorama program of breaking OFT guidelines." Now, GE, igroup and others (including HSBC's Household) will be profiled in a BBC Panorama broadcast slated for November 30. Nothing's improved -- in fact, it's getting worse.

  In terms of GE's U.S. subprime lending, see this new ICP map, which addresses state anti-predatory lending laws and efforts to preempt them -- click here to view and use.

Update of November 10, 2003: GE Capital snafus overseas -- from the London Telegraph of Nov. 8, 2003: "As a self-employed catering design consultant, in 2002 I commenced a car lease agreement. This involved a lump sum deposit and regular payments over a three-year period. The payments were by direct debit but, through an error by GE Capital Woodchester, an excess of pounds 2.35 each month was extracted from the account for the whole of that year. Telephone calls and correspondence to the company were ignored. By January 2003, GE Capital finally acknowledged the error by adjusting the first payment for the year. Then it claimed it was unable to extract monthly payments because it had changed my agreement number. I refused to issue a new direct debit instruction without formal cancellation of my old agreement and notification that the new agreement had been credited with the pounds 10,256 already paid. Since then all my numerous and persistent recorded delivery letters, telephone calls and faxes have been ignored. In addition GE Capital Woodchester Leasing will not raise a VAT invoice for the 2003 payments and has issued a new invoice dated December 2002 for a further pounds 6,914 when this was already paid under the old agreement number." -- BN, Winchester, Hants

   A: :GE Capital Woodchester is the motoring financing arm of GE Consumer Finance. It took a long while even after this column had started talking with the provider's representative for the tangle to be unraveled. Most important, a credit note for pounds 6,914 was processed. Also, new agreement documents were issued so that the original leasing agreement was cancelled and a new one set up. At this stage, however, the total repayable sum shown was wrong. Also, you were still receiving weekly calls saying that you were in default. This was because the system was reacting to non-payments under the old agreement, which was by now defunct. GE Capital Woodchester acknowledges that its service to you has been poor."

  They should be acknowledging that in the U.S., too...

Update of November 3, 2003: thievery at GE Capital occurs in Canada too. For example in British Columbia -- 100 bogus loans of up to $250,000 each is less than two years. Judge Donald Waurynchuk's said, "One thing perplexing me and people far more connected than me is, where did all the money go?" That's what we want to know, about GE Capital and its high-cost lending...

Update of October 27, 2003: Crime at GE Capital is not limited to the United States -- the Prague Post of October 23, for example, reports that "Venek Herynk, a former employee of GE Capital Bank, was sentenced by a Prague appeals court to seven years in prison for embezzlement"... It's harder, though, to get the authorities, in the U.S. or abroad, to act on GE's predatory lending practices. But we're working on it (including now having submitted another Freedom of Information Act request to the Office of Thrift Supervision, regarding their review of GE).

Update of October 20, 2003: GE last week tersely announced a "strategic alliance" in consumer credit with the Spanish bank Sabadell. Together they will offer "finance and other complementary products linked to consumer credit," Sadabell said in a filing with securities regulator CNMV. No financial details were given -- not surprising, for GE, at least in consumer finance. The stealth predator...

Update of October 13, 2003: Late on October 10, the Office of Thrift Supervision faxed Inner City Press some documents ICP requested back in August, about GE Capital's applications to expand its savings bank beyond credit cards. As best as ICP can make out, GE is still trying to limit its savings bank's Community Reinvestment Act assessment area to a few countries in Ohio, despite its nationwide lending, including subprime lending. Laughable, and to be opposed...

Update of October 6, 2003: Following ICP's Freedom of Information Act appeal of the extensive whiting-out of GE Capital's application to set up a mortgage-lending subsidiaries of its federal savings bank, GECCCC, the OTS wrote back to ICP, stating that "[w]hatever materials counsel for applicant GE Capital Consumer Card Co. forwarded to you directly on or about September 15, 2003, was presumably done as an accommodation to you... [T]he OTS has not reach a final decision nor made a final response to your request... I intend to complete that work between now and the extended deadline of October 10, 2003." So one would assume that the comment period on GE's application remains opened until at least October 14, no?

Update of September 29, 2003: last week, ICP submitted the following to the Office of Thrift Supervision, where GE's application to set up a mortgage-lending operating subsidiary remains pending:

On behalf of Inner City Press/Community on the Move and its members and affiliates, including the Fair Finance Watch (collectively, "ICP"), this is a timely appeal, under the Freedom of Information Act of the Office of Thrift Supervision's -- and GE's -- September 15 denial of ICP August 25, 2003, FOIA request for complete copies of the above-captioned pending applications.

Following ICP's August 25 FOIA request, the OTS faxed ICP a single page of the applications. ICP awaited a more substantive response -- having stated in its request that it intended to submitted comment on the applications, once it had a copy of them. Then, under cover letter dated September 15, 2003, GE's outside counsel at Sidley Austin Brown & Wood LLP mailed ICP further portions of the applications, almost entirely whited-out. Some sample pages are annexed hereto. ICP disagrees with -- and appeals from, see below -- these massive redactions. GE's outside counsel's cover letter, which was cc-ed to the OTS, provides no basis for any of the withholdings. Meanwhile, we assume that GE is urging the OTS to acting on its applications, regarding which ICP made a timely request for copies and extension of the comment periods. Given this situation -- the seeming privatization or out-sourcing of FOIA responses -- ICP is submitted this FOIA appeal at this time, and reiterating its request for an extension of the comment period. The proposal to set up a mortgage lending operating subsidiary, and to amend the business plan, are clearly related to GE's Conseco / Mill Creek / Green Tree proposal, regarding which ICP submitted timely comment. Given the clear connection, ICP should have been provided with notice and a copy of these applications, but wasn't. ICP stumbled on notice, and immediately requesting a copy and extension of comment period. Now virtually all information is being withheld. The improperly withheld documents should be provided forthwith, along with the timely requested extension of the period in which to comment on them. On this record, the OTS should not and could not legitimately rule of GE's applications other than to deny them. [Legal argumentation omitted; this was cc-ed to GE c/o Sidley Austin Brown & Wood LLP and to GE Capital, attn: Amy W. Bizar, Esq., Bill Ellingwood, et al. We'll see).

Meanwhile, from the mail bag:

Subj: GE Card.

Date: 9/24/03 5:25:17 PM Eastern Daylight Time

From: [ ]

To: GEwatch [at] innercitypress.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..

Update of September 22, 2003: last week ICP/Fair Finance Watch received from GE Capital a wildly whited-out copy of GE's application to the Office of Thrift Supervision with regard to its savings bank, GE Capital Consumer Card Co.. While over 100 pages were provided -- supposedly in response to ICP's August 24 Freedom of Information Act request to the OTS -- it is virtually impossible to figure out what GE is applying for. Apparently, after vituperatively denying that it would be doing anything but "insignificant" mortgage lending in connection with Mill Creek Bank, now GE is applying to form an "operating subsidiary" of its savings bank, in which to place its mortgage lending (including subprime lending). There is a brief concession -- GECCCC would not longer be a "limited purpose" bank for CRA purposes. But the CRA plan, as least that part that is not being withheld by GE, is ludicrously small. We'll await the OTS's FOIA response -- FOIA cannot be privatized, farmed out to a corporate itself to white things out -- and then we'll comment further.

Update of September 15, 2003: GE Capital last week moved to settle another lawsuit, agreeing to pay $58 million in cash to settle a lawsuit filed by bankruptcy creditors of Montgomery Ward LLC. "GE Capital, which owned the defunct retailer, also agreed to waive claims against Montgomery Ward valued at about $250 million, which increases the pay out available to creditors by about $22 million." Also on the sneaky front, in Japan on September 10, GE Capital raised $728 million in a Tokyo bond issue to fund acquisitions and support GE Capital's "fast-growing consumer credit business. GE Japan Funding KK.. will use some of the proceeds to pay for GC Corp., a credit card company GE Capital agreed to buy in August from Promise Co. Ltd., Japan's third-largest consumer loan company. GE Capital did not reveal the value of the GC Corp. acquisition, and a spokesman for Promise said the company had agreed not to divulge the price." That's transparency for you... In the UK, George Mudie, Labour MP for Leeds East, last week accused Vickers of sounding like "an apologist for the credit card companies" after dodging a question about whether the OFT had looked at the relationship between GE and store cards, some of which charge annual APR interest in excess of 30%. "GE's store cards include Toys 'R' Us, which charges up to 32.5% APR, Russell & Bromley, charging up to 30.7% APR, and Monsoon and Laura Ashley with up to 30.7% APR... Mudie cut in: "You are dodging the fundamental question. Have you looked at the relationship between GE Capital and these firms? This seems to be something I would think the OFT would be in on like a shot." John McFall, chairman of the committee and Labour MP for Dumbarton, said: 'Our economists have told us that GE could have between 45% and 70% of the store card market. Would you consider looking at that?'" We'll see... 

Update of September 8, 2003: a month ago -- August 4, to be precise -- GE announced a plan to sell its New York-based bond insurance company, Financial Guaranty Ins. Co., to a team lead by the PMI Group, described as a mortgage insurer. GE's entry into subprime lending appears to have blinded it to predatory lending concerns, even in this: PMI has been under fire for months for its ownership of the troubled Fairbanks Capital Corp., widely accused of being a predatory mortgage servicer. ICP's Fair Finance Watch on September 8 submitted opposition to the proposal, some more detail is included in this week's ICP CRA Report (click here to view). Sneaky, sneaky -- General Electric's savings bank, GE Capital Consumer Card Co., has been fighting to keep its designation as a "limited purpose" institution, despite acquiring (subprime) mortgage lending capacity. Last week in response to a FOIA request, the Office of Thrift Supervision provided ICP with a portion of GE's August 1 application to create a new "operating subsidiary" of its savings bank, to be called GE Home Finance Inc. This way, the mortgage lending could be moved out of the savings bank to an affiliate, and, GE argues, the savings bank could still be "limited purpose" (leading to much more limited Community Reinvestment Act scrutiny). But wait -- if this convoluted evasion is allowed, couldn't every saving bank, including WaMu and others, do the same? The OTS waiting until more than a month after GE had applied to provide any portion of the application to ICP -- since the OTS generally rules on op-sub applications within a month, scrutiny may again have been evaded in this instance...

  Stepping back to view the whole forest of GE: perhaps, if it acquires Universal, it will opened up a predatory lending theme park... Perhaps as an operating subsidiary... This musing launches from the L.A. Times last week reporting that " Wright indicated that NBC had no immediate plans to sell Universal's theme park group," and that GE "cut 7,000 workers last year from its giant GE Capital Services unit -- a financial services behemoth that GE built up with acquisitions -- as part of a program to eliminate $1 billion in annual expenses."... 

Update of September 1, 2003: on August 27, UPI reported that "GE Capital Corp has been in negotiations with Woori Financial Group to acquire 49 percent of stake in its credit card unit." In Malaysia, the newspaper The Edge reported that GE is angling to buy non-performing loans from AMMB Holdings Bhd... Reflecting AIG but also GE, on August 18, within the comment period of the Pennsylvania Insurance Department on the AIG-GE insurance deal, ICP submitted detailed comments about AIG's insurance sales practices, and, separately, about GE's practices. On August 25, the Pennsylvania Insurance Department faxed ICP a "response" by AIG, to which ICP on August 26 replied thus:

ICP's contention, which is also documented by the Insurance Product Guide which ICP submitted into the record, is that the employees of AIG American General are being trained to hard-sell credit insurance, to convince individuals who say they don't want and/or can't afford the product to nevertheless accept it. To that we can add that employees of AIG American General are told, under the heading "Why Sell Insurance?" that "[e]ach AGF branch benefits from the sale of insurance through increased profitability. Typically, forty percent (40%) of net written premiums are reflected on the PLR." ICP contends that this high percentage, and the way that AIG compensates and "incents" AIG American General employees, is virtually a "worst practice," and harms consumers... AIG's second response states vaguely that "in certain circumstances, American General Finance ('AGF') does foreclose on personal property collateral after customer default." But an obvious question is: does AIG American General only offer (that is, hard-sell) personal property insurance on property regarding which it would and does file a UCC-1, and would foreclose? The Department should ask the question, and AIG should answer.

   Notably, GE did not answer, on the issues raised...

Update of August 25, 2003: In the Czech Republic, subprime consumer finance lending grew ten percent in the past year. According to the Czech News Agency, August 19, 2003, "The leader in this segment is GE Capital Multiservis with consumer loans worth over Kc2.4bn." In Hungary, where GE already owns Budapest Bank, it is reportedly conducted due diligence on the soon-to-be-privatized Postabank (Citigroup's in the mix, too). Life Insurance International of August 20 reported that, from Aegon, "GE is acquiring about $8.5 billion in managed assets, including all the TFC units that provide distribution financing (including inventory floor plan financing) for manufacturers, as well as equipment financing services and some specialty finance units." Question: WHAT "specialty finance units"? That's often a code-name for subprime consumer finance, a field in which GE is seeking to grow, as quietly as possible, in the U.S....

Update of August 18, 2003: for this week's GE Watch report, it may be best to turn to ICP / FFW's revived AIG Watch (click here), since we've just filed comments opposing GE's proposals to sell its insurance company in Japan, and five U.S. based insurers, to AIG. In our comment to the Japanese regulators, we take the opportunity to inform them of GE's questionable subprime consumer lending practices, and ask that this be considered in opposition to GE's proposal to acquire, in Japan, GC Co. Ltd from Promise Co. Ltd -- just another of GE's recent consumer finance proposed acquisitions. Again, click here to view...

Update of August 11, 2003: under-reported in last week's hoopla about GE's sale of its bond insurance unit to PMI, et al,, and its pick-up from Aegon, was yet another purchase of a consumer finance company, this time in Japan. On August 6, "Tokyo-based GE Capital Finance said it obtained all shares in the mid-sized consumer credit firm GC Co. from its parent firm the same day. It did not reveal the price of the purchase. GE Capital Finance aims to expand its client base through the purchase of GC, ahead of a planned merger in October between it and GE Consumer Credit Corp., a financing firm operating in Osaka and also in the General Electric group. GC, which has issued about 3 million credit cards, has outstanding loans of about 100 billion yen and annual operating revenues of around 25 billion yen." And the beat goes on...

Update of August 4, 2003: from a presentation ICP / FFW is preparing, a preview:

GE Capital does retail subprime lending in virtually every continent but North America and the U.S.. Beyond GE's acquisition of the U.K. subprime lender First National -- a sort of HSBC / Household in reverse -- GE for example offers high-cost mortgage loans in Australia to "borrowers with court rulings against them" (Kavanagh 2003); GE has been offering subprime loan in Japan "under the 'Honobono Lake' brand" (Japan Economic Newswire 2003). In the subprime consumer finance in the Czech Republic, GE Capital Multiservis is "the largest firm in the field;" its general director Jioi Pathy told the Prague Tribune that "I don't expect any decrease in demand for consumer loans in the near future, because not all of the types of products that are usual in developed economies have been brought to the market yet, and this type of financing is yet to cover all commodities" (Vykoukal 2003). In South Korea, GE Capital is offering prime and subprime loans through kiosks...

  Until next time, for or with more information, contact us.

Update of July 28, 2003: Continuing criticism of GE Capital's high-rate lending in the U.K., from the Sunday Express of July 20, 2003: "GE Consumer Finance, owned by US finance giant, GE Capital, is Britain's biggest store card provider with 10 million customers. It manages cards for Bhs, Dorothy Perkins, House of Fraser and Arcadia. But although these stores came in for heavy criticism last week for charging close to 30 per cent, GE is unapologetic. A spokesman says MPs have been 'misleading and unfair.' Client director Seamus Smith adds: 'Store cards allow customers closer relationships with their favorite retail brand and give them exclusive discounts.'" From The Irish Times of July 22, 2003: " Court grants order against GE Capital manager, Former underwriting manager accused of fraud" -- "Mr. William (Bill) McGrotty... operated a system whereby customers were asked to endorse two cheques, one of which was cashed at the plaintiff's office, but in relation to which the customers never received any value. An allegation was also made by a customer concerning the provision of brown envelopes containing cash payments of undisclosed sums in return for loan approvals."

  GE and Enron: a bankruptcy court judge on July 24 approved a deal that ensures there will still be chairs to sit on at Enron Corp.'s Houston headquarters. Enron agreed to turn over half of the building's furniture, which isn't used by its reduced staff, to GE Capital Corp., which financed the furnishings.  

Update of July 21, 2003: GE Capital, rumored to have been in the bidding for Sears' credit card operation in the United States, has not turned out to be the acquirer. This may well be for the best, for consumer at least: in the U.K. last week, GE Capital was explicitly charged with usury. As reported in the Daily Mail of July 15, the all party Treasury Select Committee "tore into" GE, noting that "the American bank GE Capital, which astonishingly has not cut the interest rate to customers since April 1999. In the same period, the Bank of England base rate has halved from seven to 3.5 per cent. This, said the committee, amounts to 'fleecing the public, highway robbery and usury.'" Yep...

Update of July 14, 2003: on the July 11 analysts' conference call with GE, GE CFO Keith Sherin said " GE Capital is about 42% of the total earnings... We're still on track for having GE Capital percent of earnings be in the high 40%'s for the total year... we're going to continue to reduce the reliance on securitization from an earnings perspective. We cut it in half a couple of years in a row now and we'll probably be down 50% in 2003. So, you know, it's getting down, Don, to the point where a couple hundred million dollars out of several billion in earnings, it's not really a driver in anything for GE Capital." Bloomberg's GE earnings write-up noted that Immelt aims to shrink insurance to 15 percent of finance from 40 percent now." Apparently consumer finance -- notably including subprime -- would replace the insurance businesses to be sold off. Meanwhile, GE's July 11 earnings press release stated that GE has "agreed to acquire the personal loan and auto loan businesses of Allbank from Bankgesellschaft Berlin AG, which will add over $2 billion in assets in Germany" -- as reflected below in this Report, that proposal has been challenged, and is pending. While ICP/FFW voluntarily provided GE, upon its request, with a copy of the comment submitted to the German regulators, GE has yet to provide any portion of its application for regulatory approval in Germany....

Update of July 7, 2003: In its report last week on General Electric, J.P. Morgan Chase noted that "once again, [GE's] model is 'relying heavily on GE Capital to drive earnings performance for the overall company." Morgan Chase reduced its 2004 earnings estimate for GE to $1.66 per share from $1.70, in light of "considerable earnings headwind" facing GE in 2004 in the form of pension, Power Systems, and options expense, and the impact of portfolio transformation... Meanwhile, GE Capital's gouging is increasingly coming to light. In the U.K., for example, MPs last week lambasted GE for "outrageous" interest rates and hidden charges as an inquiry into the sector by the Treasury Select Committee got under way. George Mudie, MP (Lab, Leeds East), said: "These are outrageously ripping off consumers. How can they justify these interest rates? How can Bhs justify asking shoppers for 28 per cent on its store card?" Philip Green, the owner of Bhs and Arcadia group, declined to comment yesterday as the store cards are run by GE Capital, a US-owned finance group....In Korea, GE Consumer Finance announced on July 2 it will offer personal loans via "CashVill" kiosks at two downtown subway stations in Seoul -- rate information forthcoming...

Update of June 30, 2003: GE on June 26 announced a proposal to acquire around 700 million euros ($809.8 million) of leveraged loans from UK bank Abbey National (whose subprime lending unit GE bought earlier this year). GE said the deal with Abbey National Treasury Services -- the single biggest transaction by GE's leveraged finance team -- comprised 34 senior and mezzanine leveraged business loans spread throughout Europe. As to GE's proposed sale of insurance companies in the U.S. and Japan to AIG, we should have more in coming weeks... 

Update of June 23, 2003: Here is a response to ICP's Fair Finance Watch, from the German bank regulatory agency, the Bundesanstalt für Finanzdienstleistungsaufsicht:

We thank you for your mail of June 16th, 2003. In the context of our ownership control following section 2b German Banking Act we have to research not only into GE Capital´s business activities in Germany, but also in the USA and worldwide. We consider the information that you delivered on GE Capital´s business practices as important. In a first step, we will request from GE Capital a statement on your concern. We are sorry that section 9 German Banking Act bars us from transmitting any data concerning banks under our supervision, except they permit us to do so. We therefore cannot conform to your request of delivering copies of the filings related to the proposal by GE Capital to acquire Allgemeine Privatkundenbank from Bankgesellschaft Berlin.

A request has been made to GE for a copy of this application and for other information; we'll see.

Update of June 16, 2003: General Electric, through GE Capital, does not rest in its efforts to expand into subprime consumer finance, and to expand globally. On June 11, GE announced a proposal to acquire Allbank, and its over 70 branches in Germany, from a bank majority owned by the city of Berlin. On June 16, ICP filed comments with both the Germany bank regulators, and the Germany competition authorities; the issues summarized below on this page, are among the issues raised. And antitrust: it seems clear, as a matter of consumer protection, that GE Capital's Allbank proposal is anti-competitive. Not only would Allbank's 74 branch network be combined with GE's Service Bank's 70 branch network: GE's other lending and other activities raise issues in product markets beyond branch-banking... Relatedly, ICP has 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. For example, GE Capital is attempting to settle charges that its GE Capital Consumer Card Co. and Monogram Credit Card Bank of Georgia units have deceived and misled their customers on the bill payment date. See, e.g., Miami Daily Business Review of June 6, 2003, noting that GE proposes to settle the suit but not to pay any refunds to the customers it defrauded. This is a pattern with GE Capital. See, e.g., GE to pay $100m for unfair debt collections, Associated Press (reprinted in the Hamilton Spectator (Ontario, Canada), January 23, 1999....

   An environmental aside: GE funds oil exploration and tankers. Most recently, Brazilian shipping group UP Offshore, in which the AIG-GE Capital Latin American Infrastructure Fund has a major stake, bought four platform supply vessels " in order to provide transportation services to oil and gas companies engaged in exploration and production activities on the Brazilian Atlantic shelf"...

Update of June 9, 2003 In New York on June 3, General Electric continued its campaign to buy its way out of the environmental harms it has caused and continues to cause, this time by signing consent order to pay an $850,000 fine toward cleanup of the Mohawk Tire site. This supposedly is a remedy for GE dumping pollutants into the Hudson River for two years -- far too cheap, and far too little nexus, we'd say... The Macon (Ga.) Telegraph of June 6 reported that GE is closing two consumer finance facilities in Georgia (Atlanta and Macon) and cutting 481 jobs due to the loss of Home Depot Inc. business. GE is trying to place affected workers in other positions at the conglomerate, based in Fairfield, Conn. GE has already put another 432 employees - not included in the 481 figure - in other posts GE consumer finance spokesman Peter Tosches said... Meanwhile, the Office of Thrift Supervision has agreed, at least in part, that GE requested confidential treatment for too much information in its Conseco-related application. While that pends, GE continues its acquisitive ways in Europe -- for now...

Update of June 2, 2003: Who's the biggest subprime lender in the Czech Republic? Why, GE Capital, of course. From the Prague Tribune of June 1, 2003: "Last year consumer loans (provided by non-banking subjects) again strengthened their position, confirming Czechs' liking for living on credit. The total of CZK 15.05 billion last year represented year-on-year growth of 6%. The number of transactions approached one million contracts, but more are possible. Jioi Pathy, the general director of GE Capital Multiservis, the largest firm in the field, comments: 'I don't expect any decrease in demand for consumer loans in the near future, because not all of the types of products that are usual in developed economies have been brought to the market yet, and this type of financing is yet to cover all commodities.'" Whatever happens on Conseco / Mill Creek (there's been a deafening silence from GE), or with Sears' credit card portfolio, we'll be following up on this...

Update of May 26, 2003: GE Capital's far-flung (and hardly scrutinized) reach, from the Czech News Agency last week: Clients of Union banka who had a foreign currency account there will wait several weeks to receive the insured part of their deposits as GE Capital Bank will launch the payments of these clients on June 7, said spokesman Jan Hainz ... The battle for Sears' portfolio heats up. CBS has reported that General Electric and Citigroup "have reviewed the unit's financial information and are expected to make bids for all of the business." "We're very pleased with the level of interest and are confident we will reach a positive outcome both in getting fair value of the business and in securing a successful partnership for the future," said Sears spokesman Ted McDougal. Wayne Bopp, an analyst at Fifth Third Bank, said he was surprised that Citigroup and GE might be interested in buying the whole thing. The card unit contributes a substantial proportion, 60 percent to 70 percent, to Sears' profits, though it's dogged by delinquencies. The unit also has about $27 billion in debt. "Sears has had serious delinquencies and charge-off problems," said Bopp...

  Unreliable source? S&P, in a May 1 release on Business Wire, stated that "[t]he sale of Conseco is expected to close by May 2003." Until next time, for or with more information, contact us.

Update of May 19, 2003: In response to the questions Inner City Press/Fair Finance Watch has raised about GE's business practices, GE's most recent submission to the Office of Thrift Supervision argues that the OTS can only consider GE's Ohio-based savings bank. For example, GE states tersely that "the FlexPlus loan program is not offered by the FSB and, therefore, is not relevant to the Bank Merger Act application." This "FlexPlus loan program" involves mailing out credit offers at up to 22%; according to the GE application which ICP/FFW has challenged, GE now wants to get back into the real estate-secured lending business, with an emphasis on home improvement lending. Why then does GE not have a Community Reinvestment Act program beyond the three cities in which its three credit card banks are headquartered? That's a CRA question we're trying to get answered.

   GE also argues that issues concerning the savings bank's parent(s), GE Capital and the wider General Electric, are not relevant to the Mill Creek Bank / Conseco proceeding. As a matter of law, we believe that GE is wrong -- and as a matter of corporate responsibility such evasions are not a good idea, as will become clear through time. See, e.g., the comment of GE chairman Jeff Immelt, FD Wire of 12/18/02: " over the long-term, we have unbelievable core competency in consumer finance. And we don't play in the biggest market in the world. You know, in a substantive way.... we're evaluating different approaches to it right now. I think we've got a very good base in the private level credit card and we're just going to evaluate where other opportunities are, but if you look - again, look outside the U.S.... we do a whole series of other things that we think give us some capability to be able to play in the US. Mortgage - you know, a whole series of sweeter services, so those are the things we're evaluating, but we - if you look at our business outside US, we do think that there's some real capabilities that can be applied here." [Q: You wouldn't shy away from subprime?] Immelt, con't: "I wouldn't rule anything out. I think that there are businesses that you want the GE brand associated with more than others. And so I'll - we'll continue to evaluate that over time."

   At this stage the record makes clear that, when legitimate question about CRA and fair lending compliance are raised, GE adopts an evasive legalistic approach, choosing, by its own terms, to put off for another day substantive response on the issues. Tactically, if GE did not plan to make further acquisitions, perhaps it's be a smart (if still irresponsible) strategy. But see above -- and, as they say, watch this space.

Update of May 12, 2003 -- Two updates: GE has submitted a combative, non-substantive response to ICP's April 25 challenge to its Conseco / Mill Creek Bank proposal, and we've learned more about GE's growing foray into subprime finance in the U.S., via the Wall St. Journal of May 9, 2003. This article, "GE Plans to Move Into a Risky Area: World of Unsecured Personal Loans," by Kathryn Kranhold, quotes Marc Sheinbaum, senior vice president of consumer finance's marketing in the U.S., that GE's first mailing "played very well" and that upcoming " mailings will be tailored to various consumer profiles. In some mailings, GE will identify itself as the lead lender; in others, one of GE's retail partners will be extending the loan offer while GE will provide the financing." GE declined to reveal which retailers would be involved.

  GE's May 6 response to the Office of Thrift Supervision confirms to ICP that GE is attempting to structure its lending business in such a way as to evade the spirit and letter of the CRA. GE does not dispute that it would be acquiring over $100 million of home improvement loans from Conseco -- rather, it emphasizes that it would immediately sell a "95% participation interest" in the home improvement loans to an affiliate (which its Response does not name). GE is also seeking to evade the Freedom of Information Act. ICP has submitted timely FOIA appeal of the OTS' interim response to, and denial of, ICP April 10 FOIA request, particularly objecting to the massive redactions from GE's proposed modified business plan. Several of the pages have been entirely redacted. GE's "response" makes claims about what percentage of GE's thrift's business home improvement lending would be -- this is among the types of information redacted from the proposed modified business plan. This is illegitimate; the information, which is material to the CRA issues raised by GE's proposal, should be released immediately. Developing...

Interim micro-update of May 5, 2003: In an April 29 letter to ICP, Office of Thrift Supervision senior attorney M.J. Davis writes that, in response to ICP's request for complete copies of GE's applications to acquire Mill Creek Bank and modify its business plan, ICP has thus far been provided with "twenty two pages of redacted material from the above-referenced proposed GECCCC modified business plan, for which the applicant had originally requested confidential treatment but has recently withdrawn that request... The remained of your request is still being processed and will be the subject of a later response." ICP will appeal, and expects the timely request meeting / hearing, at that time.

Report of April 25, 2003: Here is a summary of the timely protest ICP has filed with the Office of Thrift Supervision in Jersey City, NJ and in Washington:

                                                                                                              April 25, 2003

Dear Regional Director Albanese, Director Gilleran, others:

    On behalf of Inner City Press/Community on the Move and its members and affiliates, and the Fair Finance Watch (collectively, "ICP"), this is a timely comment opposing and requesting an informal meeting, under 12 CFR §516.170 on the related application(s) of GE Capital Consumer Card Co. ("GECCCC") to acquire $2 billion in deposits, and home improvement and credit card loans from Conseco's Mill Creek Bank (R1-2003-0108 and R1-2003-0109), and the directly related application by GECCC to modify its business plan (R1-2003-0110). These applications were filed April 1, 2003; this comment and meeting request is timely.

     As sketched below, and as will be further discussed at the timely requested meeting(s), GECCCC is proposing to acquire over $100 million in real estate-secured home improvement loans, and to engage in real estate-secured home improvement lending on a going-forward basis. This makes GECCCC ineligible for treatment as a limited purpose institutions for Community Reinvestment Act ("CRA") purposes; GECCCC's reliance on an inappropriate and puny CRA program militates for the denial of these applications. Additionally, annexed hereto is evidence of GE Capital's entry into the field of direct-mail pitching of high-rate ("subprime," see infra) consumer loans, another topic into which the OTS should inquire, along with necessary consumer protection safeguards for home improvement lending.

    GECCCC's proposed modified business plan, at 19, discloses that the real estate-secured home improvement lending include loans for room additions, roofing, windows, siding and the like. This is a business line which raises consumer protection issues that go behind those raised by private label credit card lending -- GECCCC's current business line. While GECCCC's proposed modified business plan refers to "relationships with approximately 1,500 'home improvement specialists' (i.e., contractors or 'dealers') throughout the country," all identifying information about these home improvement contractors has been redacted." Beyond the need for consumer protection safeguards in the home improvement lending field into which GE proposes for the first time to enter (and in the type of personal consumer loans that GE Capital is pitching by direct mail, see Exhibit ICP-1 hereto), there are significant CRA issues raised by GECCCC's applications.

    While GECCCC claims that it would still be a "limited purpose" institution if these proposals were approved, ICP disagrees. Limited purposes banks for CRA purposes must have a narrow product line -- notably, one that does not include Home Mortgage Disclosure Act ("HDMA")-reportable loans. The OTS, as part of the FFIEC, published a Q&A Regarding Community Reinvestment (61 FR 54647) making clear that lending in "traditional retail product lines" -- such as real estate-secured home improvement lending -- makes an institution ineligible for "limited purpose" status. The Q&A states that even if an institution limited its lending activities to home mortgages, it would not be "offering a narrow product line." Id. The HMDA statute and reporting regime applies to home purchase, refinance and home improvement loans. Despite GECCCC's attempts to downplay this portion of its proposed acquisition, and of its proposed modified business plan, this home improvement lending makes GECCCC ineligible for treatment as a limited purpose institution for CRA purposes.

     Dispositively, Mill Creek Bank (until August 2002 known as Conseco Bank, and before that as Green Tree Capital Bank) is NOT a limited purpose institution -- it could not be, given inter alia the home improvement lending that GECCCC now seeks to acquire. While GECCCC might have been eligible for limited purpose status given that, prior to conversion to a thrift charter, it could ONLY do credit card lending, now that it proposes to expand into home improvement lending, it must modify not only its business plan, but also its CRA plan (which it has not done).

    GECCCC's CRA proposal, which it makes part of its acquisition applications and of its proposed modified business plan (at 13-14) is limited to the community development test, and entirely ignores the applicable CRA Lending Test. Even in the now-inapplicable Community Development test, GECCCC proposes an increase of $500,000 (or $1 million, annualized in 2004 and 2005) -- less than one twentieth of one percent of the $2 billion GECCCC proposes to acquire. Reference is made to consumer credit counseling -- certainly something GE Capital should be involved in, given its high rate card lending, through GECCCC, Monogram and otherwise -- but in no way a sufficient CRA program. Again, ICP wishes to emphasize, given the proposed acquisition and continuation of real estate-secured home improvement lending, GECCCC must be subject to the CRA Lending Test, and must put forward some credible plan (including business plan) therefor. The proposed acquisition cannot legitimately be allowed to proceed in the absence of a credible CRA plan; these issues will be discussed at the meeting(s) ICP has timely requested and which, including under the OTS' own precedents, are now required.

     We note that GECCCC's Merger Application, at 2, states that GE's "Monogram Services Company, LLC ('MSC'), an affiliate of the FSB [GECCCC], will purchase from Conseco Finance loan servicing assets... The FSB will service the purchased assets through its existing services agreement with MSC. MSC will utilize CFN Investment Holdings LLC ('CFN') to provide some of these services." There is a need for clarification regarding this last; of Monogram, we note its controversial attempts to evade consumer protection law in Louisiana and elsewhere [citations omitted].

    GECCCC's attempts to withhold all information which would identify the "home improvement contractors" Conseco's relationships with whom GECCCC now seeks to acquire is particularly disingenuous -- note that on April 22, 2003, GE Consumer Finance put out a press release announcing that it had "signed a seven-year extension of its agreement with Lowe's Companies, Inc., to continue to provide private label credit card services for the home improvement retailer's consumer and commercial customers." This same GE press release, on the Business Wire service, states that "GE Consumer Finance, a unit of General Electric Company, with $73 billion in assets, is a leading provider of credit services to consumers, retailers and auto dealers in 36 countries around the world. GE Consumer Finance, based in Stamford, Conn., offers a range of financial products, including private label credit cards, personal loans, bank cards, auto loans and leases, mortgages, corporate travel and purchasing cards, debt consolidation and home equity loans and credit insurance." Emphasis added.

     ICP has searched the FFIEC's database of 2001 HMDA data, and finds therein "GE Capital Mortgage (NJ)" and "GE Capital Hawaii." The later only reports loans in Hawaii; the former reports loans in nine metropolitan statistical areas, then a catch-all "outside of MSA" category. Strangely, GE Capital Mortgage (NJ) (reporting number 7-3002310011) reports only refinance and non-occupant mortgages. For example, in the Washington DC MSA in 2001, GE Capital Mortgage (NJ), for refinance loans, reported a 40% denial rate for applications from African Americans, and a 100% approval rate for white applicants. The number of loan applicants reported is small -- but note, in the press release above, GE's statement that it offers mortgages. For this reason, ICP has submitted a formal request to the Applicants' counsel in this proceeding for GE entities' 2002 HMDA Loan Application Register, under 12 C.F.R. Part 203, Appendix A, and will comment thereon upon receipt, and at the timely requested meeting(s).

    Attached hereto is a mailing GE Capital Financial has been targeting at consumers, offering credit lines at up to 22.99%. The product is called GE FlexPLUS; it is described by GE as a "pilot program" at this time. It is unclear into what states the mailer has been sent (as simply one example, whether it was sent into the Cincinnati PMSA, GECCCC's formal, and overly-narrow, CRA assessment area). Further information about this foray into non-card subprime consumer finance should be requested by the OTS, and/or should be provided by GECCCC in its response to this Comment.

    ICP/FFW would be remiss not to note that several GE activities raises issues under the managerial resources and other factors of HOLA. As simply one example, see, e.g., Oil Daily of January 25, 1999, reporting on human rights abuses at the partially GE-owned Dabhol power plant in India -- the plant "'employs security forces who routinely beat and harass people demonstrating peacefully against the power plant'... General Electric Corp. (GE), Bechtel Corp. and the Maharashtra State Electricity Board are the other interest owners in the project, located south of Bombay on India's west coast... more than 30 police attacks against protesters," etc.. There are ongoing questions regarding GE's environmental standards, including in New York State. These are matters of concern into which ICP continues to inquire; however, in light of GECCCC's instant proposal to acquire $2 billion, including home improvement loans, there are significant CRA issues which must be revolved, at the now-required meeting(s).

    For the record, the OTS has granted ICP's meeting requests on applications by Washington Mutual (2001) and Citibank FSB (2002), and, before that, in connection with applications by Transamerica -- and Conseco / Green Tree. ICP cites these precedents (the preamble to the OTS' promulgation of the current meeting regulations also make clear that ICP's request must be granted) in light of GECCCC's strangely vituperative April 18, 2003, letter. At that stage, ICP has requested copies of the applications under FOIA, and has indicated that it would be submitting further comments and wanted an informal meeting. GECCCC responded with nine argumentative paragraphs, none of which addressed the obvious CRA issues raised by GECCCC's proposal. Rather, GECCCC claimed that ICP "seeks improperly to delay resolution" on GECCCC's applications for regulatory approval. How would that be -- by requesting copies of the applications? By submitting timely public comment on CRA issues, and asking, under the OTS' regulations, for a meeting thereon? It is GECCCC's response, and its failure to come up with a CRA plan that is proportionate to the major acquisition and business line expansion it proposes, which is inappropriate. Despite the fact that the proposed modified business plan explicitly addresses Conseco and Mill Creek Bank, GECCCC attempts to argue that it is unrelated to the acquisition applications. This is untenable. In fact, CRA is barely addressed in the acquisition applications; the discussion, such as it is, is confined to the proposed modified business plan, much of which GECCCC continues to seek to withhold. In light of ICP's April 10, 2003, FOIA request, ICP contends that all non-exempt portions should be provided to ICP forthwith; a formal OTS determination letter should issue, and the issues raised by GECCCC's still overboard requests for confidential treatment must be resolved before the comment period closes. ICP will await scheduling of the timely requested meeting(s), and receipt of the timely requested documents. On the current record, GECCCC's applications -- R1-2003-0108, R1-2003-0109) and R1-2003-0110 -- could not legitimately be approved.

   If you have any questions, please immediately telephone the undersigned at (718) 716-3540. Thank you for your attention.

Very Truly Yours,


Matthew Lee, Esq.
Executive Director


cc: GE Capital, Stamford, CT
& Sidley Austin Brown & Wood, DC

     Update of April 28, 2003: For now, note that GE is attempting to get the Superfund law, CERCLA, declared unconstitutional. The EPA has proposed a $460 million project to dredge 2.65 million cubic yards of PCB-poisoned sediment along a 40-mile stretch of the Hudson River, with GE (the polluter) paying. GE sued; on April 1, U.S. District Judge John D. Bates ruled that his court has no jurisdiction to hear GE's complaint because Section 113(h) of CERCLA provides that an accused company cannot obtain pre-enforcement judicial review of EPA orders or response actions with respect to a contaminated site except in five explicitly enumerated circumstances, not applicable here. GE then filed a one-page "notice of intent to appeal" with the U.S. Court of Appeals for the District of Columbia. GE representative Joan Gerhardt said that GE thinks "a government agency should not be permitted in nonemergency situations to order environmental-remediation projects of unlimited scope and duration without the opportunity to get timely review by an impartial court." Hmm... Note also GE's continuing involvement with the controversial (human rights violation-tarnished) Dabhol power project in Maharashtra state, India. This was 65% owned by Enron (and 10% owned by GE); studies have detailed how these owners collaborated in violation of rights of project opponents. Now, General Electric states, along with Bechtel, that it will acquire the 65 percent stake held by the US Overseas Promotion Investment Corporation in Dabhol Power Company $ 20 million). They have signed a Memorandum of Understanding with OPIC to this effect. The MOU will be valid till Mar 2004. The two companies have approached the Government of India for a sovereign guarantee to acquire the stake... Rather than "bringing good things to life," it appears that GE has few to no social or environmental standards, beyond its attempt to undermine the Community Reinvestment Act...

    This ICP GE Watch report will be updated -- stay tuned.  Until next time, for or with more information, contact us.


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