When strains in consumer credit started showing up earlier this year, GE Money's Retail Consumer Finance unit was prepared, not surprised. "We're in the private-label card business," explains Margaret Keane, president and CEO of GE Money Retail Consumer Finance. "We saw a delinquency problem in 2007, and we jumped on it, hiring 800 collectors and reaching out to at-risk customers."

The group rethought its entire collection strategy. The number of delinquent customers is actually below last year, but dollar amount is 40-percent greater, Keane notes. "Consumers are really struggling, and we're trying to get them help before there's a problem." Keane's solution is to turn collection into customer service. "The person at the other end of the phone is more open to help, then," she says. Keane listens in on collection calls every other week. "I can learn how customers are coping, how their situations differ." The customer-friendly approach has softened the impact of delinquencies and losses on her unit, to some extent.

GE Money does not break out detailed financials for its RCF business. But through second-quarter 2008 the RCF group's net credit sales growth rose 14 percent from a year earlier and was up one percent from the comparable 2006 period, while assets jumped to $32 billion, an increase of 17 percent from the second quarter of 2007 and 14 percent from 2006.

Keane has expanded RCF into a multi-product business, including launches of GAP, American Eagle, Universal, and Chevron dual cards. The group's dual-card assets have grown from zero to $7 billion since 2003. And prepaid cards, introduced in 2007, have reached a $1-billion-sold milestone. "It's been proven that people spend more at a retailer with a dual card," Keane notes.

The current financial market woes are not shaking the confidence of her unit. "My team is positive. This business has been around since 1932, and certainly has been through cycles. The challenge is how to get the whole institution to learn about living through a tough cycle. If you've been in the business 10 or fewer years, you've never seen such a cycle." As for this downturn, Keane expects to see a "flattening out in late 2009 and a real recovery in 2010."

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