Regulators Looking Into Claims of Gender Discrimination in Apple Card Credit Decisions, Goldman Sachs Responds

Goldman Sachs and Apple have become involved in a controversy over credit decisions for Apple Card, amid complaints that those decisions appear in some cases to have been made in a discriminatory manner on the basis of gender, reports The New York Times.

The firestorm kicked off late last week when Ruby on Rails creator David Heinemeier Hansson indicated on Twitter that his ‌Apple Card‌ credit limit was twenty times that offered to his wife, even though the couple has been married for many years, file joint tax returns, and live in a community property state where all income and assets acquired while married are considered jointly owned.

Apple co-founder Steve Wozniak also weighed in, reporting that his ‌Apple Card‌ credit limit was ten times that offered to his wife, with the Wozniaks in a similar financial situation where all assets are jointly owned.

In response, New York State Department of Financial Services Superintendent Linda Lacewell has announced that her office will be looking into the situation, and she offered additional information in a Medium post today.
I responded, announcing that the New York State Department of Financial Services (DFS) would examine whether the algorithm used to make these credit limit decisions violates state laws that prohibit discrimination on the basis of sex. For the rest of the day, numerous Twitter users responded to David’s initial tweet, including Apple co-founder Steve Wozniak (who indicated his credit limit is ten times higher than that of his wife), describing similar instances where men received higher credit limits than women. Confounding this is the “black box” problem, in which consumers have little visibility into how a decision is made or why they have been rejected.

New York law prohibits discrimination against protected classes of individuals, which means an algorithm, as with any other method of determining creditworthiness, cannot result in disparate treatment for individuals based on age, creed, race, color, sex, sexual orientation, national origin, or other protected characteristics.
Goldman Sachs today responded to the controversy, maintaining that "factors like gender" are never used in credit decisions and explaining how members of a family could receive very different credit decisions. The statement did not, however, directly address Hansson's situation, which is understandable given financial privacy issues.
With ‌Apple Card‌, your account is individual to you; your credit line is yours and you establish your own direct credit history. Customers do not share a credit line under the account of a family member or another person by getting a supplemental card.

As with any other individual credit card, your application is evaluated independently. We look at an individual's income and an individual's creditworthiness, which includes factors like personal credit scores, how much debt you have, and how that debt has been managed. Based on these factors, it is possible for two family members to receive significantly different credit decisions.

In all cases, we have not and will not make decisions based on factors like gender.
Goldman Sachs also noted that it is "looking to enable" the ability for users to share Apple Cards with other members of their families, although the company did not specify when that might occur.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

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11 weeks ago
Gender discrimination with credit cards now?!? I’m convinced that quite a lot of people in this world love drama.
Rating: 59 Votes
11 weeks ago

If Goldman Sachs can publish their requirements this should all blow over.

And tell people how to scam the system?

Nothing to see here, 99% of these are automated decisions made by a computer without any kind of gender code in them. People are just looking for attention and Wozniak is trying to become relevant again.
Rating: 41 Votes
11 weeks ago
The signaling by this grown adult male is cringe beyond cringe. Grown-up thinking is simple. First, don't throw a tantrum, in public, on the Internet, at home. It makes you an infant. Second, include the scientific process into your deductions, notably falsifliability. This is hard, yes, but for a moment consider all the varying possibilities that you could be—could be—wrong! Starting with a conclusion first makes you a child.

Claiming gender discrimination without evidence is just a means to score social brownie points from the Internet and an attaboy from this moron's wife.
Rating: 34 Votes
11 weeks ago
Some of these comments are very... predictable.
Rating: 28 Votes
11 weeks ago

Some of these comments are very... predictable.

Awww. Are you upset the majority of people with a brain aren’t buying into this bs?
Rating: 27 Votes
11 weeks ago
This entire story is asinine if you know anything about how credit cards work. Your credit score is just a tiny factor of determining what your CL will be (the reality is banks don’t really use your “score” they all have different algorithms based on the same underlying factors). Even if the spouses all entered the same financial information (ie income) as they are legally allowed, it does not mean that two people will have the same CL. There are umpteen other factors at play most notably how much other credit you currently have extended and the history of that credit. The reality is credit card history does not show up on your spouse’s credit report even if you are married and ultimately liable. If you or your spouse usually adds you as an authorized user you may still have a fine credit score but exceptionally minimal credit history or a smaller outstanding credit line. You can still have a fine credit score with these factors in play but it will impact the credit you are extended for a new card in ways that differ from your spouse.
Rating: 24 Votes
11 weeks ago
Did these people look at their income vs their partners?
Most these numbers are an algorithm spitting out a number.
Rating: 21 Votes
11 weeks ago

Nothing to see here, 99% of these are automated decisions made by a computer without any kind of gender code in them. People are just looking for attention and Wozniak is trying to become relevant again.

I get that Woz is Apple co-founder, was a technical wiz with the ][ and all that, but he's long morphed into the crazy old uncle who you can't take seriously half the time.

Some of these comments are very... predictable.

Please, offer your thoughts.

I'll offer mine, having been in the lending industry.

The most illuminating thing about the reaction to this story is how little people know about how credit, and the lending industry works.

That's not helped by the writer here quoting Woz, and conflating assets with credit worthiness as it pertains to credit cards, and perpetuating that falsehood.

Lenders use a variety of criteria to determine a borrower's credit worthiness.

Income is one criteria, as are assets, as well as others like employment history.

For a revolving, unsecured line of credit like a credit card, one's credit score plays a large role, as does your stated income. Assets do not.

What most people do not comprehend is that your credit score does not take into account your gender, your assets, or your income. It is strictly a measure of one's responsible use of credit, based on your record of timely payments, how much of your credit you utilize, and other factors like defaults and bankruptcies.

I'll say it again -- your credit score has nothing to do with your income, or your assets. Do not conflate them.

Your credit score is primarily an individual score. It pertains to other individuals only when you jointly receive a line of credit with some one else, such as if you both are signatory to a mortgage, co-sign an account. That line is reported to both individual's reports.

Your credit reports are a history of all your reported credit lines and loans. How much you can borrow. How much you owe. When your last payment was. Whether you've been late. That is its scope.

Not how much you make. Not how many kids you have. Not whether you do or don't claim a gender.

Unsecured, revolving lines of credit like credit cards are usually underwritten mainly by one's credit scores, and stated income. Stated income meaning that the lender who issues the card does not independently verify that you actually make the amount your put down on the application. They are required by law to ask for that information, but your are not obligated to provide it. But if you volunteer to, it must be truthful, by law.

When talking about a secured line of credit, like a mortgage, or auto loan, the lender takes a much deeper dive.

In those cases, your assets, debts, bank accounts, investment accounts, and other factors like employment history are part of the underwriting criteria, in addition to your verified income and credit score.

But that's not what this is about.

So, unlike what I've read elsewhere, the comments here thus far have been very…good.

The Feds take discrimination in the lending industry seriously. Those who work in the industry must receive training about it, and other topics like anti money laundering laws on an annual basis.

If DHH believes his spouse has been unfairly discriminated against, his best avenue is to purse it with the authorities, not through Twitter.

Edit: spelling and grammar galore.
Rating: 20 Votes
11 weeks ago
it's entirely possible for partners to have different credit scores, happens all the time.
Rating: 19 Votes
11 weeks ago
I always knew Apple was the company that would be on the wrong side of history regarding the cis-heteropatriarchy.
Rating: 16 Votes

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