On November 25, 2014, the US Board of Governors of the Federal Reserve System ("Federal Reserve Board") issued a proposed order to apply enhanced prudential standards to General Electric Capital Corporation ("GECC"), the financial arm of General Electric. The Financial Stability Oversight Council ("FSOC") has designated GECC as systemically important under Section 165 of the Dodd-Frank Act. The enhanced prudential standards would be similar to those standards applicable to large bank holding companies and would include requirements for risk-based capital, leverage, liquidity, stress testing and other prudential standards.
Certain additional standards specific to GECC's activities would also be applied, including restricting transactions between General Electric Corporation and GECC and independence requirements for the board of directors of GECC. There is a 60 day consultation period.
The Federal Reserve Board proposed order is available at:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141125b1.pdf.
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