JPMorgan is in advanced talks to assume responsibility for the Apple credit card venture currently overseen by Goldman Sachs. According to sources familiar with the situation, discussions over the portfolio handover between financial firms and the tech giant are still in progress. However, an agreement has yet to be reached. Insiders reported that banks like American Express, Synchrony, and Barclays are no longer in contention for the card deal, giving JPMorgan a major advantage. Goldman Sachs faced regulatory scrutiny over its management of the Apple Card Goldman Sachs has been seeking to exit its partnership with Apple for a while now. What began in 2019 as a high-profile foray into consumer banking with the Apple Card soon turned into a burden, marred by technical issues, regulatory scrutiny, and allegations of algorithmic bias. Although Goldman beat out top-tier rivals to secure the Apple Card deal, the rapid growth of the program and the need to set aside reserves for potential loan losses quickly put pressure on the bank’s balance sheet. Further complicating the partnership, the Consumer Financial Protection Bureau ordered Goldman and Apple to pay more than $89 million in late 2024 after concluding they misled customers and mishandled dispute processes related to the Apple Card. According to the regulator, the two institutions gave customers false information on interest-free payment plans and had lapses in their customer service. At the time, CFPB Director Rohit Chopra commented, “Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers. Big Tech and Wall Street firms should not behave as if they are exempt from federal law.” He described the rollout as chaotic, citing that essential systems for the Apple Card were not fully operational at launch. He also noted that Goldman moved forward with the release despite third-party warnings about technological flaws in its dispute resolution system. Thus, the bank was asked to pay $19.8 million in restitution and a $45 million fine, while Apple was fined $25 million. The US watchdog also barred Goldman from offering new credit cards unless it provides a product plan to meet regulatory requirements. Consequently, mounting internal dissatisfaction and recession fears ultimately pushed CEO David Solomon to reconsider the bank’s role and begin shedding the business. The bank, however, has had trouble backing out of the partnership largely because of its customers with lower credit scores. Under the original deal, Goldman was expected to support the card up to at least 2029. Aside from the Apple card venture, it is offloading its General Motors credit card business to Barclays. Not to mention the bank had about $20.5 billion in credit card loans by March’s end. JPMorgan is asking for certain changes to be made, sources say So far, JPMorgan is the largest credit card issuer by purchase volume in the US. Securing a deal with Apple for its credit card venture would only cement its position as the leading bank in American finance. For Apple, signing with JPMorgan would mark a more stable chapter, after years of expansion overshadowed by regulatory concerns about Goldman’s billing and refunds process. Nonetheless, JPMorgan insists on certain changes, such as revisions to the servicing structure of the Apple Card, among other conditions, before agreeing to any deal, according to a person familiar with the matter. There is speculation that the bank wants to remove the Apple Card feature, calendar-based billing, which currently spreads statement dates over the month. The proposed shift would align billing so all users receive statements at the start of the month. Some insiders also claimed the bank is pushing to pay below face value for the Apple Card loans due to the losses tied to the cards. Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
