News

NYDFS Issues Fair Lending Report on Goldman Sachs Apple Card

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A lengthy declination letter: What happens when a regulator conducts an investigation and finds no wrongdoing? For its fair lending inquiry of Goldman Sachs co-branded credit card, the Apple Card, NYDFS issued a report on March 23, 2021 that resembles a lengthy declination letter. The report makes clear after “exhaustive review of documentation and data” NYDFS failed to uncover “evidence of deliberate or disparate impact discrimination.” Other notes:
– The investigation commenced following a viral Tweet from a tech entrepreneur alleging his wife received less favorable terms under the Apple Card.
– Tweets and other social media are increasingly visible sources for investigations (worthy or not)
– NYDFS undertook a massive statistical analysis as part of its investigation, finding no wrongdoing
– Goldman Sachs offered strong cooperation and a consumer-oriented program to assist people with inadequate credit ratings to improve their credit, a program it called “Path to Apple Card”
– 70,000 consumers enrolled in “Path to Apple Card” and about 5,000 of them have been approved for an Apple Card
– The report contains valuable guidance on the agency’s current thinking on fair lending

The report is here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202103231

MATTHEW LEVINE JOINS “BANK TALK” PODCAST ON THE ANTI-MONEY LAUNDERING ACT OF 2020

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Matthew Levine joined Trish Sullivan of Deutschebank and Chris Boehing of Paul Weiss Rifkind Wharton & Garrison to discuss the new anti-money laundering amendments to the Bank Secrecy Act for theis episode of the International Institute of Banker’s podcast “Bank Talk.”   The podcast can be found here:    

WHAT IS A REGULATOR’S FAVORITE SNACK? LOW HANGING FRUIT — RISK ALERT FROM SEC DIVISION OF EXAMINATIONS

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What is a regulator’s favorite snack? Low hanging fruit: the recent Risk Alert from the SEC’s Division of Examinations concerning Suspicious Activity Reporting (SAR) for Broker-Dealers indicates a cornucopia. Some examples found by the Division:
– Firms failing to report as suspicious large deposits of low-priced securities that were immediately followed by liquidation of those positions and wiring out of the proceeds
– Firms failing to report noticeable customer sales of shares occurring simultaneously with explicit promotional activity
– Firms failing to tailor red flags to address risks associated with trading activity commonly engaged in by customers
– For cyber-intrusions, firms failing to include in a SAR known details concerning the nature of the scheme, including theft of assets or funds

Periodic check ups on policies, procedures, governance and systems surrounding SAR reporting are a key means of avoiding the consequences of a deficiency letter or enforcement action.  The alert is here:

https://www.sec.gov/files/aml-risk-alert.pdf