Goldman Sachs, which launched a credit card business in partnership with Apple, announced yesterday that it is being investigated by the Consumer Financial Protection Bureau for how it handles customer refunds and billing disputes, and how it furnishes information to the credit bureaus.
Goldman, which is making a big push into the credit card lending market, also offers credit cards as part of an agreement with General Motors. The investment bank disclosed the investigation in a filing with the Securities and Exchange Commission. It said it is cooperating with investigators. It was unclear whether the CFPB was looking into the Apple or GM cards, or both.
Goldman had about $12 billion of credit card loans at the end of the second quarter, according to a published report. The bank is hoping its consumer lending operation will bring in $4 billion in annual revenue by 2024, which is double what it will make this year, according to the report. David Solomon, the chief executive of Goldman, said the bank is actively looking for other opportunities to expand its credit card and consumer lending operations.
The investigation does seem to fit the agenda for Rohit Chopra, the Director of the CFPB. A month after he started, Chopra announced that the CFPB was opening an investigation into how tech companies, like Apple and Google use the payment information they collect from consumers. He has also gone after some of the biggest names in the financial services industry, including a recent enforcement order with U.S. Bank that resulted in a $37 million fine.