(Adds CFPB, DOJ, GE comments)
By Emily Stephenson
WASHINGTON, June 19 General Electric's
credit card unit agreed to pay nearly $230 million to resolve
allegations that it did not offer some services to Spanish
speakers and engaged in other practices that harmed consumers,
U.S. authorities said on Thursday.
The unit offered two debt repayment programs to most card
holders but not to customers who said they preferred to
communicate in Spanish or had an address in Puerto Rico, the
U.S. Consumer Financial Protection Bureau and the Justice
U.S. officials said $225 million would go to customers
affected by their exclusion from the two programs and by
unrelated deceptive practices. The company said it had already
offered much of the required help to borrowers.
Federal law bans discrimination based on race, national
origin and other characteristics in credit transactions.
"The scope of the potential harm as well as the blatant
nature of the discrimination is particularly troublesome," said
Jocelyn Samuels, who heads the Justice Department's civil rights
division. She said it was the federal government's largest-ever
credit card discrimination settlement.
GE has filed to spin off the card unit as a separate company
and recently changed its name to Synchrony Financial. It is part
of GE Capital, the company's financial services arm.
GE, which neither admitted nor denied the findings,
identified the discriminatory conduct itself and reported it to
the consumer bureau, spokesman Russell Wilkerson said. It
disclosed the investigation in March.
"While our compliance programs are strong, we can always get
better," Wilkerson said in an email.
The consumer bureau said the unit separately misrepresented
several products that would allow consumers to eliminate some
debt in the event of disability or other hardships.
Telemarketers unfairly led consumers to think the products
were free and failed to tell some borrowers they were not
eligible to use the products. The bureau discovered the activity
during a December 2012 examination, Director Richard Cordray
In total, about 746,000 consumers were affected by the
discriminatory and deceptive practices, Cordray said.
In addition to $225 million in consumer relief over the two
sets of practices, the company must pay a $3.5 million penalty
related to the deceptive marketing activities, the bureau said.
(Reporting by Emily Stephenson, Editing by Franklin Paul and