Goldman Sachs Reveals Multi-Agency Credit Card Probe

A federal investigation into Goldman Sachs’ credit card business has apparently expanded.

The Wall Street giant revealed last year that the Consumer Financial Protection Bureau (CFPB) was looking into that side of its operations.

But in its annual report — filed Friday (Feb. 24) — Goldman amended its earlier statement to say it was cooperating with the CFPB “and other governmental bodies relating to investigations and/or inquiries concerning GS Bank USA’s credit card account management practices.”

The report adds that Goldman Sachs was providing investigators information on “the application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, reporting to credit bureaus, and any other consumer-related information requested by them.”

The latest part of that statement, dealing with “other consumer-related information,” is also a new addition to Goldman’s past pronouncement about the probe.

The news comes a little more than a month after reports that the Federal Reserve was investigating Marcus, Goldman Sachs’ consumer business. A report by the Wall Street Journal citing unnamed sources said the Fed is examining the bank’s oversight of the consumer business, its management and governance, and how it handles customer problems.

The sources said the Fed probe began as a standard review of Marcus in 2021 and escalated into a full investigation last year.

Goldman has declined to comment on the Fed matter, and as PYMNTS has noted, such investigations are not an immediate sign of wrongdoing. The same report points out that the investigation, “and the fact that it is focusing on the digital-only Marcus, speaks to the complexities of building out platforms and digital-only efforts.”

This month also saw news that Goldman Sachs had halted plans to launch a branded credit card for retail customers, though a bank spokesperson downplayed the decision, saying the card was discussed but never a “meaningful” part of the company’s strategy.

Goldman Sachs has been scaling back its retail banking business as part of a major reorganization that involved streamlining the company into three divisions, one focused on investment banking and trading, another on asset and wealth management, and the third dealing with transaction banking.

As part of that shift, Marcus was folded into Goldman’s asset and wealth management unit. At the same time, CEO David Solomon said the firm would renew its direct-to-consumer strategy.

“We will focus on existing deposit customers and consumers that the bank already has access to through channels like workplace and personal wealth, rather than seeking to acquire customers on a mass scale,” Solomon said during an earnings call in October.