(Reuters) – The U.S. Federal Reserve is probing the consumer business of Goldman Sachs Group Inc to determine whether the bank had appropriate safeguards in place as it ramped up lending, the Wall Street Journal reported on Friday, citing people familiar with the matter.
Shares of the investment bank were down nearly 3%.
The central bank is concerned the Wall Street giant did not have proper monitoring and control systems inside Marcus, its consumer unit, as it grew larger, the report said.
The probe, which grew out of a standard Fed review of the business in 2021 and intensified into an investigation last year, is also examining instances of customer harm and whether they were properly resolved, the report added.
“The Federal Reserve is our primary federal bank regulator and we do not comment on the accuracy or inaccuracy of matters relating to discussions with them,” a Goldman spokesperson told Reuters.
Bloomberg News reported in September that the bank’s Marcus unit was facing a Fed review.
The probe would add to troubles for Goldman, which is executing a strategic pivot that includes refocusing on its core trading and investment banking business after losing money in its consumer banking venture.
Goldman’s credit card business is also being investigated by the Consumer Financial Protection Bureau (CFPB), the bank disclosed last year.
(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)
