Goldman Sachs is under multiple federal investigations of its consumer business. The Consumer Financial Protection Bureau and the Federal Reserve are probing areas from credit cards to bank accounts.
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From a new report in the trade journal PYMNTS:
…in its annual report — filed Friday (Feb. 24) — Goldman amended its earlier statement to say it was cooperating with the CFPB “and other governmental bodies relating to investigations and/or inquiries concerning GS Bank USA’s credit card account management practices.”
But that’s not all:
The news comes a little more than a month after reports that the Federal Reserve was investigating Marcus, Goldman Sachs’ consumer business. A report by the Wall Street Journal citing unnamed sources said the Fed is examining the bank’s oversight of the consumer business, its management and governance, and how it handles customer problems.
These investigations could result in huge fines or worse. However, no wrongdoing has been proven thus far.
What we do know is that Goldman is losing a fortune on its consumer bank. Losses total over $3 billion at several units since 2020 alone.
Consumer banking was supposed to help Goldman diversify.
Its mainstays of mergers, IPO’s and trading are boom and bust businesses. But consumers tend to keep their bank account and credit cards in the same place for many years.
Instead, Goldman is posting its worst quarterly results in a decade. Add that to numerous scandals and Goldman is looking like the weak man on Wall Street.
Now that multiple federal agencies are poking around inside Goldman Sachs, there’s no telling what they’ll find. I’m willing to bet there’s more chicanery we don’t yet know about.
I was always reluctant to open a Marcus account, despite the great rates. Doing business with a company with such a checkered history scares me.
I guess I’m not alone.
What do you think investigators will find at Goldman?
Leave a comment and let me know!
More on markets:
SEC Refuses to Address Massive Fraud in Markets
Short Sellers Lose $17 Billion in 2023
Major Hedge Fund Down 54% — Survival in Doubt
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Photo: Goldman Sachs CEO David Solomon. “Unleashing the Potential Of Women Entrepreneurs Through Finance and Markets” by World Bank Photo Collection is licensed under CC BY-NC-ND 2.0.
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