Report: CFPB Set to Fine Goldman Sachs $50 Million After Credit Card Probe

The Consumer Financial Protection Bureau (CFPB) reportedly is set to order Goldman Sachs to pay more than $50 million in penalties related to its handling of fraud and refunds in its credit card business.

The regulator is expected to announce its enforcement action as soon as this week, The Wall Street Journal (WSJ) reported Tuesday (Oct. 22), citing unnamed sources.

The CFPB did not immediately reply to PYMNTS’ request for comment.

The regulator has been investigating Goldman Sachs’ customer service operations, and its Apple credit card partnership in particular, according to the report.

The regulator has looked into issues around providing cardholder refunds and addressing fraud, the report said, citing the unnamed sources.

Goldman Sachs disclosed in August 2022 that it was cooperating with an investigation by the CFPB into its credit card business, PYMNTS reported at the time.

The investment banker said in a regulatory filing that the CFPB probe was looking at its “credit card account management practices, including with respect to the application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.”

At the time, Goldman Sachs offered two credit cards via partnerships with Apple and General Motors, but it was unclear which card was the focus of the investigation.

The federal investigation into Goldman Sachs’ credit card business apparently expanded by February 2023.

At that time, the bank said in its annual report that 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.”

Goldman Sachs delivered an earnings report Oct. 15 that reflected its continuing shift away from Main Street banking and its goal of massing an even greater Wall Street and corporate lending presence.

When an analyst asked about the future of the Apple Card during an Oct. 15 earnings call, Goldman Sachs CEO David Solomon said, “There’s a lot of focus on that. I think we’ve been pretty clear on our messaging that we are continuing to narrow our consumer footprint. … I don’t have a lot more to say about where we are with Apple Card other than we’re running it, improving it. … But I think the direction of travel at this point is pretty clear.”