GE Capital Bank was founded in 1994. The CEO is Keith Sherin. The headquarters is in Norwalk, Connecticut, but has a global clientele that includes 55 countries. GE Capital is a leasing and lending source for businesses. It also funded healthcare, real estate, aviation, and media projects. GE has sold $16 billion to Goldman Sachs Bank (GS Bank). These assets are just the deposits of GE. What was a lending and loan company to small and medium industrial businesses, is now developing into a major contributor to new industrial ideas and products. Due to the recent sale, there is a GS portfolio that consists of the deposit platform, and the GE portfolio that consists of the industrial platform.

 

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The Good

  • Technological advances
  • Funding for projects

Technological Advances

GE Capital has a history of practicing savvy business techniques.  It saved money by underwriting its own loans.  Furthermore, those loans are funded by deposits.  GE Capital also supports community development and consciously favor organizations that operate under the Community Reinvestment Act (CRA).

With the new sale, GE has transferred all deposit assets to GS.  The remaining assets will combine with the industrial platform, creating a smaller, higher quality industrial business. Now there is a GS portfolio that consists of the deposit platform, and the GE portfolio that consists of the industrial platform. Some of the new components of the industrial platform include:

  • Predix cloud - Internet cloud built for industrial businesses and their machinery
  • Ecomagination - research and investment in the development of technology  that will decrease the consumption of carbon footprint, water and energy
  • Healthymagination - funding of medical research and relationships between health care organizations, customers and the government to increase health care coverage
  • Txchnologist - research and development of strategies to improve conditions of the elderly and medicine, such as solid foods with a softer texture, a newly developed machine that can predict toxic shock, and the creation from a biodegradable energy source from human electricity sources, and research into suspended animation, or the freezing and warming of the human body to save a life
  • SkyTran - a mass transit system that is stationed on tracks above the ground and powered by gravity-defying magnets

Funding for Projects

When GE Capital provides financial assistance to companies, it is more than just a loan to purchase products.  They fund projects or strategies that improve the quality of products and services, and hence the quality and success record of their clients. The new GE is getting 75% of their profit from industrial businesses and making high returns to their investors.

The Bad

  • Online bank only
  • Disadvantages
  • Customer service issues

Online Bank Only

GE Capital is solely an online bank.  This carries all of the inconveniences of not being able to go into an actual bank office to transact business, which may include the absence of person-to-person assistance and limited banking options.

Disadvantages

Customers can only access their funds through online and electronic transfer. The electronic transfers can only be done on weekdays from 7 a.m. to 11 p.m. CT. There are no ATM.s.  Withdraw from one account (inside to outside) to another can only occur six times per statement cycle, up to $125,000. Other common complaints of GE Capital Bank customers include:

  • Bankruptcy: GE Capital went bankrupt and had to ask FDIC to lend them $139 billion to get them out of debt in 2008.  This bank rescue program loosened the reins for GE so they would qualify. GE Capital needed to ask for a loan to offset bad investments in their company twice in the same year.  According to Vernon Hill, CEO of Commerce Bancorp, opaque (hard to measure) assets and unstable financing caused GE Capital's plunge.
  • Lack of focus: GE Capital is involved in various new industrial ideas and projects that could be opaque and unstable once again.  There is no assurance that they will be profitable.  On their website, GE states that they are inventing the next industrial era.  There is no definitely known outcome of these new ventures.  Those who choose to invest in GE's new industrial projects are taking a huge risk.

Customer Service Issues

In the meantime, deposit customers are predominately dissatisfied with the customer service. These complaints come with a 1 or 2 star rating and comprise 90% of the 1, 352 posted reviews.  There are some complaints about rude representatives and technical glitches online, but most of the negative reviews are about far more serious matters.

A common problem GE Capital customers faced was payment discrepancies.  Either payments were made and not acknowledged, made late and accrued excess late fees, or settlement payments were not allowed.  Many of the customers who had these experiences decided to pay off their loans for the sake of their credit rating, and dissolve their business relationship with GE.

There were additional complaints that involved credit card payments.  Some customers are stating that their card number is being used to make purchases they did not authorize.  Other customers claim that they are being harassed even though payments are being made on time.  As a result of these alleged missed payments, the customer would be charged additional payments and/or late fees to "bring the account current".

The Bottom Line

GE is a household word, but may not necessarily have the hospitality to go with it.  GE Capital has an unstable past, a reinvented present, and an uncertain future.  Due to assets investors could not measure, GE went bankrupt and had to borrow billions of dollars to save their business.

Hoping to improve their situation, they have recently sold all deposit accounts to GS Bank, creating a smaller, more specialized portfolio in industry.  They plan to invent a new industrial era, which includes research and manufacturing ideas and projects that could, if successful, cause hugely significant improvements on our planet.  However, this platform remains undeveloped.  Investments at this time could prove to be a huge risk. Customers can also expect the following from the service:

  1. For those GS customers, the interest rates are still comparatively low, but the online banking set up seems to be accompanied by an overwhelming amount of complaints about lost payments, unwarranted late fees, account summary errors, rude representatives, and many others.
  2. It might be more profitable to make good customer service the priority over research and development.  After all, it is the deposits, credit purchases and investments of those customers that fund the research and manufacturing.

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