GE Capital Global Responsible Lending Standards

GE Capital Global Responsible Banking Standards

Consumer Finance Standards

As the Company began work in 2006 to create global responsible lending standards, we embarked on a series of stakeholder dialogues to get a view of the role of responsible lending standards, to understand what changes should be made to the standards and to better understand how GE compares to competitors in this area. The majority view was that while governments legislate for the baseline of good practice, companies should self-regulate above and beyond this. With this information in hand, GE Capital Retail Finance and Global Banking created companywide lending standards that would become a minimum mandatory requirement, even for countries where government rules are less stringent. In 2010, Global Banking expanded its responsible lending standards to apply to all banking products and services, including deposits, securities and investments, and payment and account keeping services.

The results of this initiative are GE Capital’s global responsible banking standards:

• APR distribution: Establishes a market-appropriate annual percentage rate (APR) range per product, monitors for accounts that are above the upper limit and takes appropriate actions.
• Fees: Ensures that all fees are clearly and fully disclosed to customers.
• Interest rates: Establishes market-appropriate interest rates per product, and ensures clear disclosure of rates to customers.
• Risk: Ensures security products are competitive and appropriate in terms of cost, return & risk. Establishes standards to determine investment appropriateness/suitability for applicable customers.
• Clear language: Uses clear and simple terms that help customers make informed decisions about products and services. This standard addresses the business’s disclosure practices and the value it puts on transparency.
• Customer indebtedness: Ensures that we do not knowingly sell products that the customer cannot afford.
• Financial difficulty: Ensures the company has a process to respond to customers whose circumstances have changed and who are experiencing financial difficulty.

In addition to finalizing the global standards, the company also implemented responsible lending training that all GE senior leaders globally have to complete.

GE Commercial Finance Standards

GE’s business finance units have adopted and constantly seek to improve on certain keys to successful financial performance in a manner that accounts for appropriate environmental and social issues. We have learned to:

• Get involved early
• Hire experienced professionals
• Encourage new financial products that offer economic and social benefits
• Integrate the environmental function into existing transaction processes
• Communicate
• Take advantage of GE’s broad understanding of emerging environmental and social issues
• Use the Equator Principles, among other tools, in connection with developing country construction projects