GE Capital Stops Lending to Gun Shops...

climbnjump · Apr 24, 2013

This was just announced, but the extent of the lending ban - as well as the possible impact - isn't yet clear. There was one talking head on TV stating that the ban applies to shops that ONLY sell guns.

GE Capital Stops Lending to Gun Shops

The interesting twist on this is that GE Capital issues the "Dick's Sporting Goods" branded credit card. Dick's still sells guns, so is GE going to be pulling the cards? Obviously, Dick's sells other sporting goods as well, so perhaps not.

ETA:
The original Wall Street Journal article that reported this is behind the WSJ paywall, so I can't link to it here. But it does clarify that the ban applies ONLY to retailers whose SOLE business is selling firearms. They will continue to do business w/ Dick's, Walmart, etc.

(As a side note, the article added that the father of the Sandy Hook shooter is a GE executive.)

bikemutt · Apr 24, 2013

I will be closing my Dicks Sporting Goods account accordingly.

tomrkba · Apr 24, 2013

Guns are a legal product. Isn't there some sort of equal lending law against discriminating against stores selling a legal product?

Texan Scott · Apr 24, 2013

Bad business... politics over profits. Oh well. Somebody slightly more capitalist is bound to realize how much MONEY there is on guns, and step in for the cash.

r1derbike · Apr 24, 2013

If this is true, I won't be using my GE financed credit cards any more. A considerable amount of punitive damage, as I use them all the time.

JVaughn · Apr 24, 2013

I notice the same article mentioned the Freedom Group being up for sale as well. Not wanting to hijack your thread, but does anyone have any further insight on this?

climbnjump · Apr 24, 2013

I notice the same article mentioned the Freedom Group being up for sale as well. Not wanting to hijack your thread, but does anyone have any further insight on this?

The Cerberus web site does not have any newer info on it than the original press release from December 18 stating that they would be persuing the sale of Freedom Group. So I'll assume from that that no change has yet taken place.

Coop45 · Apr 24, 2013

Credit partners of GE Capital. clicky

oneounceload · Apr 24, 2013

The Calpers pension fund ordered them to divest of the gun companies or they would pull their 750 million dollars invested with them

feedthehogs · Apr 24, 2013

Cerberus is run by very conservative people. They are not going to sell off a money maker. They will just shift the pension funds of the liberal hords to something less offensive.

joeschmoe · Apr 24, 2013

When did they ever lend to gun shops? Never. GE doesn't invest in gun stores.

climbnjump · Apr 24, 2013

When did they ever lend to gun shops? Never. GE doesn't invest in gun stores.

This is not "GE" we're talking about, it is their financial services arm, GE Capital.

Did GE Capital finance gun stores? It was not really a significant part of their business, but yes they did.

joeschmoe · Apr 24, 2013

When did GE CAPITOL invest in gun shops? Please cite where in the article it says they ever have or any other source.

Sounds like big talk from people who were never in the business to begin with.

hey_poolboy · Apr 24, 2013

They don't "invest" in the store. A shop owner can take out a line of credit for "floorplanning". It gives them a way to afford to have more guns on the shelves to sell. They buy the guns on the line of credit, then pay the interest payments every month, and pay off guns by serial number as they are sold.
We don't operate a gun store, but we are a mom and pop store that used to use GE as a financing option until the banking collapse. After that, they quit lending to the pool and spa industry as well, thinking it was a bad risk.

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Akita1 · Apr 24, 2013

feedthehogs said:
Cerberus is run by very conservative people. They are not going to sell off a money maker. They will just shift the pension funds of the liberal hords to something less offensive.

Cerberus is a PE fund which equates to opportunistic: buy at a good strike, squeeze it to raise EBITDA, then flip at a nice multiple. That's it, nothing more. The only reason they're moving on Freedom is because CALPERS (or CALSTERS, can't recall which one) is threatening to pull it's investment. Not sure conservative or liberal has anything to do with profit for shareholders, generally.

Akita1 · Apr 24, 2013

joeschmoe said:
When did GE CAPITOL invest in gun shops? Please cite where in the article it says they ever have or any other source.

Sounds like big talk from people who were never in the business to begin with.

Good point. On the retail side, GE capital typically lends to chain-affiliated businesses (franchises, et al) that have a national or regional system of support (hence the Dick's reference). This really isn't surprising given who runs the company, but in the end GECC is beholden to EPS of the whole GE, as GECC represents a significant portion of their business. Must not be a material segment of their business if they're willing to pitch it.

oneounceload · Apr 24, 2013

The amount of money GE Capital would lend pales in comparison to how much they have invested in trucks, rail cars and ships.
This is just some PC news statement, most likely to appease the exec who had a kid killed a Sandy Hook

Shadow 7D · Apr 24, 2013

GE capitol is closing their consumer lines pretty much world wide, too much 'risk' for them to be profitable and trying to get out of banking (and the regulations) and into 'main' segments of their markets, which means stopping lending PEOPLE money, and more about financing airlines that buy their jet engines...

verdun59 · Apr 24, 2013

Is this the same GE that owns (owned) those famously impartial networks NBC & MSNBC ?

climbnjump · Apr 24, 2013

When did GE CAPITOL invest in gun shops? Please cite where in the article it says they ever have or any other source.

Sounds like big talk from people who were never in the business to begin with.

As I mentioned in the original post, it was detailed in the Wall Street Journal article referenced by the MarketWatch article.

Also, as I mentioned before, a link to that WSJ article won't work here because the article is behind their subscription pay wall. However, if you Google this exact phrase, "GE Capital Cuts Off Lending to Gun Shops" (including the quote marks) then you might be able to sneak behind the wall and read the article for yourself, Joe.

Or, if you can't figure out how to accomplish that, then try this link: Here that also references the WSJ article.

joeschmoe · Apr 24, 2013

climbnjump said:
As I mentioned in the original post, it was detailed in the Wall Street Journal article referenced by the MarketWatch article.
Also, as I mentioned before, a link to that WSJ article won't work here because the article is behind their subscription pay wall. However, if you Google this exact phrase, "GE Capital Cuts Off Lending to Gun Shops" (including the quote marks) then you might be able to sneak behind the wall and read the article for yourself, Joe.
Or, if you can't figure out how to accomplish that, then try this link: Here that also references the WSJ article.

No quote? You couldn't find it either? Because it's not in the article. One article "references" another and links to another link that references the same article, all with no info.

climbnjump · Apr 24, 2013

No quote? You couldn't find it either? Because it's not in the article. One article "references" another and links to another link that references the same article, all with no info.
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GE Capital Stops Lending to Gun Shops...

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