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.