Federal regulators in the US are conducting two investigations in to General Electric’s (GE) credit card business, Synchrony Financial, according to a regulatory filing related to the unit’s planned IPO.
The federal investigations in to Synchrony Financial relate to potential violations of consumer finance laws.
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The company has said it’s in talks with the Consumer Financial Protection Bureau (CFPB) regarding a review of its debt cancellation products and related marketing practices.
The company has also notified the CFPB of a problem with its Spanish language filing after spotting it as part of an internal audit.
The matter was referred to the Department of Justice (DoJ), initiating a civil investigation over a possible violation of the Equal Credit Opportunity Act, with some Spanish-speaking customers including customers in Puerto Rico being excluded from certain statement credit and settlement offers, according to the filing.
Synchrony Financial have acknowledged the investigations may have a "material adverse effect" on business and results.
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By GlobalDataCareCredit, GE Capital’s medical credit-card division, agreed to pay up to $34.1m in December 2013 as part of a resolution with the CFPB, after it failed to adequately explain loan terms in financing plan for medical and dental procedures.
According to the latest filing, resolution of the federal investigations could include "customer remediation" as well as civil money penalties and required changes to how Synchrony Financial conducts its business.
Related to:
GE files for IPO of North American Retail Finance business
GE Capital to pay credit card customers $34.1m over false enrolment practices
