Goldman Sachs Reveals CFPB Investigation Into Firm’s Credit Card Practices

Banks

7/6/2023BanksMarket

By: Ken Chase.

Estimated reading time: 2 minutes

Goldman Sachs has revealed that the Consumer Financial Protection Bureau (CFPB) is currently investigating the company’s credit card practices. The firm disclosed the news in a regulatory filing on August 4, noting that the watchdog agency was looking into how it manages its credit card accounts, refund and billing error resolution processes, advertising, and credit bureau reporting.

Goldman currently offers two credit card options, in partnership with General Motors and Apple. The firm has indicated that it is fully cooperating with the investigation.

In its most recent earnings report, Goldman reported a sizable increase in its credit card loan totals. Just last year, the company’s total credit card loans were a reported $5 billion. As of July, that amount had swelled to roughly $12 billion.

Goldman’s entry into the credit card market is part of the company’s broader strategy to increase revenue from its consumer products to further diversify its operations. The company’s Apple Card offering was released in 2019 in a partnership with Apple, Inc. Its co-branded General Motors card launched in January 2022.

The news from Goldman Sachs came as other large financial firms issued similar warnings to stakeholders, in what some observers have called an attempt to prepare shareholders for bad news later this year. For example, Citi announced on August 4 that regulators are investigating sales and trading associated with the bank’s “sovereign and other government-related securities.”

Meanwhile, Citi, Morgan Stanley, and Bank of America have all recently indicated that they expect to be penalized by regulators for potential violations of record-keeping requirements related to employee use of personal texting for various business communications.