Apple’s partner bank for the Apple Card is facing an investigation for credit card practices in the US
The investigation is reportedly going to be led by the Consumer Financial Protection Bureau. The US watchdog will be focusing on Goldman’s credit card account management practices in the United States. Apple’s credit card, Apple Card, is a major component of exactly this area of the financial firm’s business, as it is one of the two consumer-faced credit card offerings (the other one is a co-branded credit card with General Motors). The investigation was disclosed by Goldman in its quarterly form 10-Q, which was filed with the United States Securities and Exchange Commission.
Now, a bit more about this watchdog. The Consumer Financial Protection Bureau, abbreviated as CFPB, is the top US agency and watchdog responsible for consumer protection in the financial sector.
Goldman stated it is cooperating with the investigation. The credit card management practices that are being investigated reportedly include application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.
The financial firm’s partnership with Apple for the Apple Card is the largest initiative it has started so far in the consumer credit card business. The firm is responsible for approvals or denials of credits, credit limits, disputes, credit bureau reporting, and more for Apple Card.
This is not the first time Goldman has been investigated since it began partnering with Apple. Shortly after the Apple Card launched, there were accusations against Apple and Goldman for the algorithms that were used to determine credit card limits. More specifically, the accusations were focused on the use of gender discrimination in said algorithms.
These accusations then led the New York Department of Financial Services to start an investigation. Goldman responded to the accusation by stating that the credit limits and credit decisions are based on a customer’s creditworthiness and not based on gender, age, sexual orientation, or any other basis that was forbidden by the law. On the other hand, Apple has never publicly responded to those accusations.
There are no other details about this new investigation by the CFPB so far. It is, however, very likely Apple Card is at least included in the investigation, given the fact, as we already reported, that it is the largest initiative Goldman has in the consumer credit card business.