Goldman Sachs Faces Potential Fine over Credit Card Business

(Reuters) – Goldman Sachs is facing a fine in the tens of millions of dollars from the U.S. Consumer Financial Protection Bureau (CFPB) over its credit card business, according to the Wall Street Journal.

The enforcement action relates to an investigation into Goldman's customer service operations, particularly focusing on its partnership with Apple (NASDAQ:AAPL) for credit cards.

The enforcement action is expected this week, with total penalties, including customer reimbursements, potentially exceeding $50 million.

Both Goldman Sachs and the CFPB declined to comment on the report.

In 2022, Goldman disclosed ongoing investigations by the CFPB and other government entities into its credit card practices, which encompassed customer service, refunds, and billing error resolution.

This fine comes as Goldman struggles to exit its consumer business two years after scaling back its operations. The future of Goldman's partnership with Apple is also uncertain, with JPMorgan reportedly in discussions to take over as Apple's credit card partner.

Recently, Goldman ended its credit card partnership with General Motors (NYSE:GM), which has since partnered with Barclays.

Additionally, Goldman faced a $415 million hit last week due to a writedown associated with transferring its credit business to Barclays. This writedown adds to a series of losses tied to Goldman's consumer banking efforts, which were intended to diversify revenue streams beyond investment banking and trading. The bank is now refocusing on its traditional core business areas.