Apple Faces New Regulatory Reality With Credit Card Launch
Apple's move to branch out from retail and offer financial services means it will need to heed a host of new federal and state regulations.
March 27, 2019 at 01:30 PM
3 minute read
Yesterday, Apple Inc. announced it will release a credit card, a new venture into financial services that will require it to comply with a host of new financial regulations.
Apple Card is set to be available in the U.S. starting this summer on iPhone's Apple Wallet app as well as in physical form, and will be backed by established financial institutions Goldman Sachs and Mastercard, according to the company.
"They are now in a regulated industry," said Clark Hill of counsel Thomas Brooks and previous GC of the Federal Deposit Insurance Corporation (FDIC), which insures depositors. "Before Apple was a retailer that offered a lot of services and products and provided a payment mechanism." Now, they must comply with a variety of banking requirements, he said.
Federal laws Apple will likely have to comply with include the Truth in Lending Act, Equal Credit Opportunity Act and Dodd-Frank Wall Street Reform and Consumer Protection Act. Likewise, Apple will be held to various state regulations governing financial transactions. Josh Taylor, an attorney and lead content strategist at Smokeball, said these include usury laws governing the amount of interest charged on a loan, which varies by state.
With its new credit card, Apple has already claimed it will place a high standard on data privacy. Indeed, a physical Apple Card will be shipped to cardholders by request, with no card number, CVV security code, expiration date or signature on the titanium designed card as a way to protect users' data, the company said.
Goldman Sachs will also not share Apple Card users' data to third parties for marketing or advertising, Apple added. While Apple will hold Goldman to a high data privacy standard, Goldman will likely hold the tech company to federal and state financial standards as well.
"Goldman, if they are the funder and bank involved, they have to make sure any relationship they have with Apple is in compliance with all the regulatory issues Goldman has to deal with," Brooks added.
Apple's credit card announcement comes as iPhone purchases are dwindling and Apple looks to other services, including original video content, to improve its sales. Apple joins Amazon.com Inc., which also offers a credit card for purchases in partnership with JPMorgan Chase & Co., as a retailer venturing into financial services.
Social media platforms are also segueing into finance as well. Instagram, a platform known for photo and video posting, now allows a viewer to buy an item pictured on an account entirely through the app. While such transactions brings more compliance requirements, it can help drive traffic on the social media site, lawyers said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrending Stories
- 1Apply Now: Superior Court Judge Sought for Mountain Judicial Circuit Bench
- 2Harrisburg Jury Hands Up $1.5M Verdict to Teen Struck by Underinsured Driver
- 3Former Director's Retaliation Suit Cleared to Move Forward Against Hospice Provider
- 4New York Judge Steps Down After Conviction for Intoxicated Driving
- 5Keys to Maximizing Efficiency (and Vibes) When Navigating International Trade Compliance Crosschecks
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250