Matt Levine explains why Apple and Goldman Sachs face a $90 million penalty over the Apple card: CFPB fines of Goldman ($45 million), Apple ($25 million) and customer refunds ($19.8 million).

I guess the way it works is that when people get their credit card statement, they look at it, and then they call up their bank to dispute any fraudulent charges. So the day that people get their credit card statement is a busy day for the bank’s customer service department.

Fortunately, there is not generally one day that people get their statements: Everyone gets their statements on different days, so the work is spread out over the whole month. It would be bad if everyone got their statements on the first of the month: They’d all call customer service that day, the lines would be swamped, calls would get dropped, frauds would go uncorrected, regulators would step in, the bank would be embarrassed and fined millions of dollars. And then the rest of the month the customer service representatives would sit idle. Bad plan.

It’s like airline customer service. While every day they tell customers that “call volumes are heavier than usual” they get much heavier than usual on days there is a storm. They don’t staff call centers assuming that every day there will be a storm, or else most days they’d be paying for unused call center capacity.

While most cards have statement close dates throughout the month, Apple wanted everyone getting the bill for their card at the start of the month. This was meant to be a consumer-friendly thing. But Goldman’s customer service couldn’t keep up with the peaks in start-of-month requests.

Probably American Express and Chase would have said ‘woah, that’s a bit crazy’ but also ‘we have a lot of cards in our portfolio and can probably handle the call volume spike’. Goldman Sachs was new to the co-brand credit card game, and they did not realize this.

Levine concludes,

It’s not quite that it’s illegal to send out all your credit-card bills on the first of the month. “If you send out all the bills on the first of the month you’ll pay a $50 million fine” is an unexpected product of the interaction between consumer financial regulation, fraud prevention and customer-service utilization rates. If you’re new to credit cards you might not know that.

Goldman learned a lot of expensive lessons with the Apple Card, which is why they want out of the consumer credit card business. But the Apple Card was a clear money-loser to everyone except Goldman even before it launched. And now they know that offering consumer-friendly features gets you in trouble with the consumer regulator, too.