Goldman cleared the bias in the NYDFS Apple Card investigation

Dive Brief:

  • Goldman Sachs did not intentionally discriminate against women in its credit decisions regarding the Apple Card, according to a report Tuesday by the New York Department of Financial Services (NYDFS).
  • Deficiencies in customer service and a perceived lack of transparency, however, have undermined consumer confidence in fair credit decisions, the agency said.
  • Since the investigation was launched in November 2019, Goldman and Apple have aimed to improve transparency and help rejected applicants increase creditworthiness, and companies have changed policies that required approved applicants to wait six months before complaining about credit conditions, the ministry said.

Dive Insight:

The NYDFS investigation stemmed from a series of customer complaints on social media claiming that the then three-month-old Apple Card granted women lower credit limits than men. For example, software developer David Heinemeier Hansson, tweetao that the credit line Goldman offered him on his Apple card was 20 times higher than the one offered to his wife, even though Hansson and his wife file joint tax returns and he has a lower credit score than her.

“Goldman and Apple are delegating a credit assessment to the black box,” Hansson told Bloomberg 2019. “It’s not the intent of gender discrimination, but it’s the result of gender discrimination.”

The NYDFS said Tuesday it found no evidence of a different impact on Goldman’s credit decisions – applications from women and men with similar credit characteristics generally had similar outcomes – and the decisions were “explanatory, legal and in line with the Bank’s credit policy.”

However, Linda Lacewell, the regulator’s supervisor, said the case should serve as a reminder that, nearly five decades after the Equal Credit Opportunity Act, credit scoring models and anti-discrimination laws need refreshment.

“Consumer frustration over Apple’s card policy that does not allow account holders to add an authorized user has drawn attention to the following: A person who relies on spouse access to credit and accesses those accounts only as an authorized user may mistakenly believe they have the same credit profile as spouse “Lacewell said in a press release. “This is part of a broader debate we need to have about equal access to credit.”

In a statement Tuesday, Goldman said he remains committed to providing fair and equal access to credit. “We appreciate the Financial Services Department’s thorough investigation and welcome its conclusion that there was no breach of fair loans,” spokesman Patrick Scanlan told Bloomberg.

The NYDFS said it reviewed thousands of pages of records, written responses and interviews of Apple Card applicants and witnesses in its investigation, and analyzed contract takeover data for approximately 400,000 New Yorkers.