General Electric Is Looking to Leave Banking System
General Electric revealed on Monday that the company has completed a sale of all of GE Capital Bank’s U.S. deposits to Goldman Sachs.
According the Boston Business Journal, the move will allow GE to finally rid itself of its last remaining U.S. bank charter, which may happen as soon as this week.
The deal, which federal regulators signed off on last month, will include the transfer of $16 billion in online deposits from GE Capital Bank to Goldman Sachs Bank USA. Employees who worked on servicing the deposit platform will also be transferred.
According to the BBJ, GE Capital chairman and CEO Keith Sherin said in a statement that the move will allow the company to dump its final bank charter in the U.S. as well as its its FDIC insurance.
The attempt to leave the banking system is part of GE’s plan to shed the GE Capital unit’s “too big to fail” designation. GE sent out a formal request to federal regulators in March asking that GE Capital no longer be categorized as a nonbank systemically important financially institution, commonly called SIFI.
The latest move means that GE has gotten rid of a majority of its legacy financial services businesses.
Should GE lose its SIFI designation, that means the company would no longer have to deal with tighter regulations, such as stress tests and liquidity requirements, that come with being a “too big to fail” institution.
What remains of the GE Capital staff is set to stay at the company’s Connecticut location and will not be shipping up to Boston when the organization sets up its new world headquarters in Fort Point.