The end of the Apple Card adventure may be a little more painful than expected for Goldman Sachs! The bank could be forced to pay tens of millions of dollars in fines from the Consumer Financial Protection Bureau, due to the way it handled complaints about the Apple Card, but also other credit cards.
A penalty worth several million!
Following numerous complaints, the Office (in vo Consumer Financial Protection Bureau or CFPB) therefore opened an investigation into Goldman Sachs’ credit card account management practicesparticularly in terms of dealing with fraud, delays, billing errors or reimbursements. A priori, he would have particularly focused on the partnership with Cupertino.
These investigations were also confirmed in 2022 by the Bank. The decision is expected in the coming days and would be particularly damning. Indeed, Goldman Sachs risks a financial sanction of more than 50 million dollars !
Who would take over for the Apple Card?
According to the Wall Street JournalJPMorgan Chase is reportedly currently in talks with Apple and best placed to take over the Apple Card program. Things are reportedly well advanced and an agreement could even be considered in the coming months. Apparently, the talks have accelerated in recent weeks without details being communicated.
In the past, several names have been mentioned to take up the torch, such as Synchrony Financial, Citigroup, Capital One, Discovery, AMEX, ou encore Barclays. There had already been talk of discussions with JPMorgan Chase, but at that time they would have resulted in nothing, given the potential reduction in profits. Perhaps the firms have since found common ground.
Remember that Goldman Sachs had been looking for a way out of this agreement for several months. Indeed if the card is a great success for Cupertino (Apple Savings reportedly recorded more than a billion dollars in deposits in the first four days of its launch), this is not really the case for the investment bank, which only lost money in history.
According to Reutersin the search for a new partner, Goldman Sachs must face pressure from bidders to reduce the value of its stake in order to make the price more attractive.In other words, Cupertino will have to review its copy and modify certain terms of the agreement.
