The Federal Reserve is closely monitoring Goldman Sachs’ consumer activities, as evidenced by a recent report that caused the bank’s shares to decline on Friday.
According to the Wall Street Journal, the Fed is looking into whether Goldman’s Marcus subsidiary, the company’s now-reduced attempt to engage American customers, had put in place sufficient controls prior to its growth into personal loans.
On the news, shares fell 2.54%. Goldman has only gained 0.15% so far this year.
According to the Journal article, which cites individuals familiar with the situation, the regulator is examining into whether Goldman had the proper controls in place to protect customers when it boosted lending in its Marcus division.
Marcus had already been under examination by the central bank, according to a September Bloomberg news article.
“The Federal Reserve is our primary federal bank regulator, as we told the Wall Street Journal. We do not comment on the accuracy or inaccuracy of matters relating to discussions with them.”a firm spokeswoman told CNBC.
David Solomon, the CEO of Goldman, recently acknowledged that the bank’s dismal quarter was partially caused by taking on excessively in the consumer banking sector.
The New York-based investment bank reported last week that its quarterly profitability had missed by the most in more than ten years due to declining income and growing costs.
Information from American Banker