GE Capital has stopped offering consumer financing programs to gun shops in response to the “industry changes, new legislation and tragic events.”
A GE Capital spokesman stated that the move expanded on a policy the company established in 2008. The company, General Electric’s lending arm, stopped offering new consumer financing for purchases of guns from gun shops.
However, existing relationships with gun shops were grandfathered in, allowing them to continue. The lending cutoff only applies to retailers whose main commodity is guns.
That means it does not affect retailers like Walmart, Cabelas, Bass Pro Shops, and other sporting goods stores. GE Capital spokesman Russell Wilkerson explained that the company added that the catalysts “have caused widespread reexamination of policies on firearms.” He added that the loans to gun customers has been “an immaterial part of our sales volume.”
GE Capital joins a list of some of the nation’s largest lenders, which also do not finance gun purchases. Those lenders include Wells Fargo, which stopped the practice in 2004, and Citigroup.
But while GE Capital is not the only lender to stop financing gun purchases, the group is receiving criticism for its timing. The move comes after high-profile mass killings in Newtown, Connecticut; Milwaukee, Oregon; and Aurora, Colorado.
GE is the second big financial firm to back away from the gun business in light of the Newtown shootings, which claimed the lives of 27 people along with the shooter, Adam Lanza. Days after the killings, Cerberus Capital Management LP, which owns Freedom Group Inc., stated it would try to sell the gun company.
Freedom Group Inc. makes brands like Remington, Bushmaster, Marlin, and H&R. GE Capital’s decision likely had more to do with Newtown, Connecticut. GE is based in Fairfield, not far from Newtown. The location is where Lanza killed 27 people, including 20 children and his mother, before he killed himself. Lanza’s father, Peter, is also a GE executive.
While a typical handgun costs more than $300, financing guns is a marginal activity. The company’s exit from the market will have little overall impact on the US gun market, whose sales totaled $11.7 billion in 2012.
Do you think GE Capital is right to halt loans for gun shop purchases?
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