Shares of US bank Goldman Sachs lost 3% of their value on Friday after the Wall Street Journal reported that it was being investigated by the US Federal Reserve.
According to the newspaper’s report, which cited its own sources, the finance ministry had concerns that the bank did not have adequate monitoring and control systems in place in the consumer business, especially after it began to expand.
The regulator is also looking into how cases of customer harm were handled, including whether problems were flagged internally and, if so, whether they were resolved properly, the Wall Street Journal reported.
The U.S. bank is already under investigation by the Consumer Financial Protection Bureau for its handling of credit card accounts, including how it resolved account errors, issued refunds to cardholders and advertised its Marcus cards.
Goldman Sachs, also known as the bank of the rich and powerful because it specialized in advising the business elite, moved into consumer banking in 2016, in a market dominated by larger rivals such as JPMorgan Chase & Co. and Bank of America Corp., writes the Wall Street Journal.
This change did not bring the long-awaited results, and Goldman Sachs recently announced that it was discontinuing the provision of personal loans and abandoned its plans to offer a checking account widely.
A week ago, Goldman Sachs reported that it has lost $3 billion since 2020 from its consumer lending.
