The CFPB is probing Goldman Sachs and its credit card practices, the bank said in a filing. The CFPB examination is the latest issue for Goldman and its popular Apple Card.
Investigation into Payments, Credit Reporting, More
The Consumer Finance Protection Bureau (CFPB) is examining Goldman Sachs’ credit card practices. According to a regulatory filing last week, the CFPB is looking into the company’s credit-card practices, including how it resolves incorrect bills and processes refunds. The probe also examines ads and how Goldman credits “nonconforming payments” and reports information to credit bureaus.
The bank is cooperating with the ongoing CFPB investigation, a spokesman for the New York-based firm said.
Goldman’s Growing Consumer Portfolio
Goldman Sachs launched its US consumer credit card venture in 2017. The bank first made a splash with the Apple Card in 2019. The portfolio expanded further in 2021 with the acquisition of the GM Rewards credit card portfolio from Capital One.
Despite spending big to attract customers to the business in the last five years, Goldman has yet to make its credit card venture profitable. The bank’s core business remains trading and investment banking, with the credit card arm an attempt to find new income streams and diversify.
The Apple Card remains the bank’s most popular credit card property by a considerable distance. According to the regulatory filing, Goldman Sachs stated it had about $11.8 billion in outstanding credit card balances at the end of June, most of it from Apple Card accounts.
Previous Investigations into Goldman Sachs
This is not the first time that Goldman Sachs has been investigated for credit card products. In 2019, Goldman Sachs was accused of discriminatory behavior on allegations of gender bias and credit limits in 2019.
Additionally, the Apple Card has experienced sporadic issues since its launch. The myriad of issues included systematic problems with account management and bill payment, plus cash back rewards errors. The New York State Department of Financial Services cleared Goldman Sachs of those claims in 2021.
Related Article: CFPB Fights Excessive Credit Card Late Fees