CFPB Probes Goldman’s GM, Apple Credit Card Business Practices

Goldman Sachs said Thursday (Aug. 4) it is cooperating with an investigation by the Consumer Financial Protection Bureau (CFPB) into its credit card business.

In a regulatory filing Thursday, the investment banker said the CFPB probe was looking at Goldman’s “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.”

Related: Goldman Adds GM as 2nd Major Co-Branded Card

The Wall Street giant offers two credit cards via partnerships with a pair of major corporations: its Apple Card, launched in the summer of 2019, and another card through General Motors, which was introduced at the start of this year.

It was unclear which of the two cards was the focus of the investigation. Apple, GM and the CFPB were not immediately available for comment Wednesday.

Last week, PYMNTS reported that Apple’s move into the buy now, pay later (BNPL) space has the attention of CFPB Director Rohit Chopra, leading to a look at the larger implications of big tech companies entering the lending space.

Learn more: Apple’s Move Into BNPL Space Triggers Alarm at CFPB

The CFPB is examining the “implications of Big Tech entering this space” and is considering several issues, including whether Apple Pay Later could “reduce competition and innovation in the market,” Chopra said.

See also: Goldman Consumer Banking Revenues Grow 25% as Loss Reserves Surge 497%

The Goldman investigation comes — as PYMNTS noted last month — at a time when Goldman Sachs has been broadening its appeal to retail banking customers, emphasizing digital channels to fuel savings and lending activities.

Those efforts seemed to bear fruit in July when the bank reported that revenues connected to consumer and wealth management came in at about $2.2 billion, rising 25% year on year. Meanwhile, Goldman’s traditional bread and butter, investment banking and asset management, saw drastic drops year-over-year.

The company’s results show $12 billion in credit card loans on the books, compared to $11 billion in the first quarter and up from $5 billion a year ago. Installment loans were $5 billion, up from $4 billion in the first quarter and $3 billion last year.