General Electric Company (NYSE:GE) is no longer making loans with gun shops through its subsidiary GE Capital Retail Bank. The Wall Street Journal reports that more than one gun shop owner has received a letter from GE Capital saying that it decided to stop offering financial services to their stores.
The company is at least the second large lender to pull back from loaning to gun shops in the wake of the Newtown, Conn. School shooting in December. Twenty first-grade students and six adults were killed in the shootings at Sandy Hook Elementary School.
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General Electric Company (NYSE:GE) is located in Connecticut, and many of the company’s employees live in the area where the shootings took place. In fact, several of them apparently have children who attend Sandy Hook Elementary. Also Peter Lanza, who is the father of Adam Lanza, the gunman in the shootings, is actually an executive at GE Capital, according to The Wall Street Journal.
General Electric Company (NYSE:GE)’s withdrawal from financing fun purchases is only applicable to retailers whose main goal in business is to sell firearms. Companies like Wal-Mart Stores, Inc. (NYSE:WMT), which happen to sell firearms in addition to numerous other products, are not affected by the GE Capital’s decision.
Although the lender’s decision to withdraw from financing firearms will likely have a minimal overall effect on the firearm industry, it is a symbolic one. Also gun shop owners say buyers often spend more if they are able to secure financing. The average firearm costs over $300.
General Electric Company (NYSE:GE) Capital began financing weapons sales in 2006, but it stopped accepting new firearm customers two years later. Previous gun shop owners were grandfathered in at the time, but in February, GE Capital announced it would cut off financing for gun shops completel.