GE Capital, once a big player in housing finance, is now just a handful of days away from exiting the U.S. banking system after the company completed the sale of its online deposit platform to Goldman Sachs.
The sale also included including the transfer of all of GE Capital Bank’s U.S. deposits, approximately $16 billion of deposits, which are comprised of online savings accounts, online Certificates of Deposit, and brokered CDs, have been transferred to Goldman Sachs.
And according to GE Capital, that sale positions the company to terminate its Federal Deposit Insurance Corp. insurance and “extinguish” its final U.S. bank charter, which the company said it hopes to complete by the “end of the week.”
Recently, the Department of Justice subpoenaed General Electric’s records in regards to subprime mortgages from GE’s financial services business, WMC Mortgage Corp.
Recently, GE disclosed in its annual report, that its lending unit, GE Capital, and defunct subprime lending unit, WMC, received the subpoenas in January about the purchase and sale of residential mortgage loans from 2005-2007.
Now, the company is preparing to fully exit the U.S. banking system.
According to an announcement from GE Capital, exiting the U.S. banking system and eliminating the exposure of the U.S. deposit insurance safety net to GE Capital are “key aspects” of GE Capital’s request to the Financial Stability Oversight Council to rescind GE Capital’s designation as a nonbank Systemically Important Financial Institution.
The announcement states that on March 31, GE announced it filed its request for GE Capital’s SIFI rescission as the company continues to transform GE Capital into a “smaller, more focused” financial services firm.