US Banking Regulators Alert Goldman Sachs Division
A division of Goldman Sachs has reportedly ceased taking on riskier fintech clients following warnings from US banking regulators. The Federal Reserve has expressed concerns about insufficient due diligence and monitoring processes within the bank’s transaction banking business (TxB) when accepting high-risk non-bank clients. While Goldman Sachs declined to comment on supervisory matters, the regulators specifically raised issues with the team providing banking infrastructure to companies such as Stripe and Wise. However, TxB’s cash payments services business was not criticized.
Goldman Sachs’ Retreat from Consumer Banking
This development comes shortly after Goldman Sachs sold off its financial planning unit as part of its extended retreat from consumer banking. The company’s CEO, David Solomon, has been focusing on expanding into new areas and establishing more partnerships since assuming leadership in 2017. However, the recent critique from the Federal Reserve is yet another setback for the bank’s efforts. Additionally, Goldman Sachs has made significant changes to its consumer-focused project, Marcus, selling off a significant portion of its loan portfolio over the past year.
