Anonymous sources say the Federal Reserve is investigating Marcus, Goldman Sachs’s consumer-banking branch. This follows a probe by the Consumer Financial Protection Bureau (CFPB) last month into Marcus’s credit card practices.

Why should we care?
The latest round of regulator scrutiny can induce a headache for Goldman but a sigh of relief for consumer-banking startups. Once hailed as the fuel for Goldman’s next stage of growth, Marcus has instead failed to take off and has hemorrhaged billions of dollars since its launch—more than $4 billion since 2016. The Fed’s investigation might not mean gigantic fines or some other punishment at its end, but, with cash tight across the board, Marcus’s $1.2 billion loss this year as well as this most recent hurdle are destined to make debates over Marcus’s future more urgent and contentious. (Especially since these losses are eating into compensation at the company, which are being cut by 31% this year.) According to Credit Suisse analyst Susan Katzke, Goldman management acknowledges that it “tried to do too much at once,” and is looking to double down on its tried-and-true wealth management services. This is welcome news for consumer-banking startups, which thought Marcus would emerge as a modern, incumbent competitor with seemingly unlimited funding to win in the space. Without Marcus looming overhead, the modern consumer-banking space may become a more level playing field.