The Justice Department called it the largest government credit-card discrimination settlement ever. The department joined the Consumer Financial Protection Bureau in announcing the agreement.
In addition, GE Capital Retail Bank must refund $56 million to about 638,000 consumers who were subjected to deceptive marketing practices to promote extra credit-card products known as "add-ons," in an agreement with the CFPB. The practices included falsely marketing products as free of charge, failing to tell consumers that they didn't qualify for the offers because they were retired or disabled, failing to make it clear that consumers were making a purchase and falsely telling them the offers were for a limited time only.
GE Capital also is paying a $3.5 million penalty to the CFPB for deceptive marketing.
The $169 million includes payments to roughly 108,000 borrowers who fell into those two categories. They were among a total of about 400,000 borrowers who received the offers.
The bank said it's already made most of the payments.
The violations occurred between January 2009 and March 2012, according to the government.
"This kind of conduct has no place in the consumer financial marketplace," CFPB Director Richard Cordray said during a conference call with reporters. "People deserve to be given clear information and they deserve to be treated fairly."
The CFPB said it found the deceptive marketing practices during a routine examination of the bank. GE Capital discovered the discrimination violations through its own internal audit process and voluntarily reported them to the CFPB, which alerted the Justice Department.
The bank, which changed its name to Synchrony Bank earlier this month, said in a statement that it "regrets this error."
Synchrony's "priority is treating customers fairly and when issues are identified, it is committed to making it right," said the bank, which is based in Stamford, Connecticut.