The bank responsible for the Apple Card is now facing an investigation by a leading US consumer watchdog in its credit card division. reports Reuters. Goldman Sachs, the bank in question, disclosed this information in a regulatory filing.
Apple’s partner bank for the Apple Card faces an investigation into credit card practices in the US
The investigation is reportedly being led by the Consumer Financial Protection Bureau. The US watchdog will focus on Goldman’s credit card management practices in the United States. Apple’s credit card, Apple Card, is an important part of precisely this part of the financial company’s business, as it is one of two consumer credit card offerings (the other is a co-branded credit card with General Motors). The investigation was disclosed by Goldman in its Quarterly Form 10-Q, filed with the US Securities and Exchange Commission.
Now a little more about this watchdog. The Consumer Financial Protection Bureau, abbreviated as CFPB, is the primary US agency and watchdog responsible for consumer protection in the financial sector.
Goldman agreed to cooperate with the investigation. The credit card management practices reportedly under investigation include applying for refunds, crediting non-compliant payments, resolving billing errors, advertising and reporting to credit bureaus.
The financial company’s partnership with Apple for the Apple Card is the largest initiative it has launched in the consumer credit card business to date. The company is responsible for credit approval or denial, credit limits, disputes, credit bureau reporting, and more for Apple Card.
This isn’t the first time Goldman has been investigated since it began partnering with Apple. Shortly after the launch of the Apple Card, allegations were made against Apple and Goldman for the algorithms used to determine credit card limits. More specifically, the allegations centered on the use of gender discrimination in said algorithms.
These allegations subsequently led the New York Department of Financial Services to launch an investigation. Goldman responded to the allegation by stating that credit limits and credit decisions are based on a customer’s creditworthiness and not on gender, age, sexual orientation or any other basis prohibited by law. On the other hand, Apple has never publicly responded to those allegations.
Further details about this new investigation by the CFPB are not yet available. However, it is highly likely that Apple Card will at least be included in the investigation, as it is, as we reported, Goldman’s largest consumer credit card initiative.