Arab Today, arab today general electric retail credit bank to pay 169m in bias case
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General Electric retail credit bank to pay $169m in bias case

Arab Today, arab today

Arab Today, arab today General Electric retail credit bank to pay $169m in bias case

Consumer Financial Protection Bureau Director Richard Cordray testifies before the Senate on Capito
New York - AFP

 General Electric's retail credit bank has agreed to pay $169 million to Hispanic borrowers barred from two credit-card debt repayment programs due to discrimination, US federal government authorities said Thursday.
GE Capital Retail Bank, which recently changed its name to Synchrony Bank, will compensate some 108,000 borrowers who allegedly were excluded from bank lending-relief programs from 2009-2012.
The agreement is the federal government's largest credit-card discrimination settlement in history, said the Justice Department and the Consumer Financial Protection Bureau (CFPB) in a statement.
Under one of the programs, the bank, part of GE unit GE Capital, gave a credit to borrowers who held balances greater than $700, had three payments past due and met other criteria.
Another of the bank's programs offered to settle a borrower's credit-card debt if the cardholder paid a share of the account balance ranging from 25-55 percent.
However, customers of GE Capital Retail Bank were not invited to the programs if they tagged their accounts as "Spanish-preferred" for communications or if their mailing addresses were in Puerto Rico, according to the government's complaint against the bank.
As a result, "Hispanic borrowers experienced higher debt levels and longer periods of debt," often with consequent economic damage or emotional distress.
"Discrimination has no place in the consumer financial marketplace," said Richard Cordray, director of the CFPB.
"No one should be excluded from credit opportunities simply because of where they live or the language they speak."
Under the terms of the settlement, GE Capital Retail Bank also will reduce or completely forgive, the affected borrowers' credit card balances. It will also eliminate negative credit reports for borrowers that occurred during the period.
The Justice Department said the discrimination was first identified and reported by GE Capital to the CFBP.
Synchrony Bank "regrets this error," the bank said in a statement. "Its priority is treating customers fairly and when issues are identified, it is committed to making it right."
A GE Capital spokesman said the company would "take the learnings" and "improve our operations and customer focus."
Separately, GE Capital agreed to pay $56 million to consumers who were victims of deceptive marketing practices to sell add-on products such as credit card security.
The CPFB said an investigation found GE Capital telemarketers misrepresented the services to some 638,000 consumers, suggesting for example, that customers would not have to pay for the products when in most cases they would have to.

 

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