GE Capital pulls gun store lending

By InvestSMART · 26 Apr 2013

By InvestSMART ·
26 Apr 2013

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GE Capital, General Electric's lending arm, has stopped offering consumer financing programs to US retailers whose main business is selling guns, in response to "industry changes, new legislation and tragic events".

The move, said a GE Capital spokesman, expanded on a policy established in 2008. That year, GE Capital stopped offering new consumer financing for purchases of guns from gun shops, but existing relationships with gun shops were grandfathered in and those programs continued.

Fewer than 75 retailers are affected by the recent policy change, a fraction of 1 per cent of gun retailers in the US, said the spokesman, Russell Wilkerson.

The terminated financing programs, as a business, were "immaterial" to the company, he said.

The lending cutoff applies only to retailers whose primary business is selling guns. GE Capital is still offering financing to other retailers who sell many kinds of merchandise, including guns. Those retailers range from Wal-Mart to sporting goods chains.

The move by GE Capital comes in the aftermath of the school shooting in Newtown, Connecticut.

General Electric, the giant industrial and finance company, is headquartered in Connecticut, and some employees have children at Sandy Hook Elementary School, where the tragedy occurred.

Adam Lanza, the Sandy Hook gunman, was the son of Peter Lanza, an executive at GE.

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Frequently Asked Questions about this Article…

What change did GE Capital make to its consumer financing for gun retailers?

GE Capital said it has stopped offering consumer financing programs to US retailers whose primary business is selling guns, expanding on a prior policy and ending those specific lending programs.

Who announced the GE Capital policy change and what did they say about it?

A GE Capital spokesman, Russell Wilkerson, said the move expands a policy from 2008 and that the terminated financing programs were immaterial to the company.

How many gun retailers are affected by GE Capital’s lending cutoff?

Fewer than 75 retailers are affected by the recent policy change — a fraction of 1 percent of gun retailers in the US, according to GE Capital.

Does the GE Capital cutoff apply to big retailers like Walmart or sporting goods chains that also sell guns?

No. The cutoff applies only to retailers whose primary business is selling guns; GE Capital continues to offer financing to other retailers that sell many types of merchandise, including guns, such as Walmart and sporting goods chains.

Is this policy entirely new or an expansion of an earlier GE Capital policy?

It’s an expansion. In 2008 GE Capital stopped offering new consumer financing for gun purchases at gun shops but grandfathered existing relationships — the recent change broadens that stance to stop those grandfathered programs.

Was the decision linked to any particular event or motivation?

GE Capital said the change was in response to 'industry changes, new legislation and tragic events.' The move came in the aftermath of the Newtown, Connecticut, school shooting.

How material is the loss of these financing programs to General Electric’s business?

GE Capital described the terminated financing programs as 'immaterial' to the company, indicating the financial impact on General Electric is minimal.

Does GE have any connection to the Sandy Hook tragedy mentioned in reports?

General Electric is headquartered in Connecticut, and the article notes some GE employees have children at Sandy Hook Elementary School. It also reports that Adam Lanza, the Sandy Hook gunman, was the son of Peter Lanza, who is an executive at GE.