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GE admits constant contact with regulators over igroup

GE Capital has admitted it is in regular contact with the Office of Fair Trading, the FSA and the Mortgage Code Compliance Board over its sub-prime lending subsidiary igroup.

The US giant, which paid almost £200m for igroup – formerly called Ocwen – in May, said this week that it maintains contact with the three regulators about the lender to ensure its “high standards of best practice and integrity” are met.

GE also acknowledged that igroup – and therefore GE – has an option to buy Cornwall broker The Mort-gage Group, which was acc-used in January in a BBC Panorama programme of breaking OFT guidelines.

Panorama had secretly filmed a TMG training department employee explaining to a recruit that, although it claims to be independent, “99 per cent of the business we do goes to igroup”.

As a result of the allegations, GE says the broker has since been the subject of a full review by accountants Price-waterhousecoopers to ensure “industry best practice”.

GE also admitted that it had knowledge of the link between igroup and TMG from the outset of its acquisition negotiations in May and says the three regulators have been made fully aware of the relationship.

GE Capital Global Consu-mer Finance chief executive officer Stuart Sinclair says: “We will make sure that igroup is fully integrated within GE and take a close look at The Mortgage Group to decide on the basis of all the evidence available to us how to proceed.”

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