Apple Card and Goldman Sachs Under Investigation Following Allegations of Gender Bias

Posted on November 11, 2019 by Mehedi Hassan in Apple with 24 Comments

Apple Card and Goldman Sachs are under investigation by the New York Department of Financial Services. The investigation comes shortly after allegations of the Apple Card’s gender bias against women.

The issue was first brought up by Ruby on Rails creator David Heinemeier Hansson on Twitter, who faced the exact same issue with the Apple Card. He and his wife have filed joined tax returns and despite her having a better credit score than him, Apple Card gave him 20x the credit limit than his wife.

Apple was quick to address the problem as soon it became a PR issue, giving Hansson’s wife a higher credit limit. But that didn’t stop the New York Department of Financial Services launching a probe into Goldman Sachs’s credit card practices as it’s the provider for the credit on the Apple Card.

“The department will be conducting an investigation to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex. Any algorithm, that intentionally or not results in discriminatory treatment of women or any other protected class of people violates New York law,” said a spokesman for Linda Lacewell, the superintendent of the New York Department of Financial Services.

According to Bloomberg, a Goldman Sachs spokesperson said that it’s possible for two Apple Card family members to receive significantly different credit limits, but “in all cases, we have not and will not make decisions based on factors like gender.”

That’s obviously not what has happened here, and Goldman Sachs is now facing investigation for a potential gender bias on its algorithms. And has Hansson said, “it’s not a gender-discrimination intent but it is a gender-discrimination outcome” which is the main problem in this case.

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Comments (24)

24 responses to “Apple Card and Goldman Sachs Under Investigation Following Allegations of Gender Bias”

  1. wright_is

    There was a big discussion about this over on the TWIT Community over the weekend.

  2. Thom77

    This is a non story that is being blown up because it involved Goldman Sachs which is heavily represented in the Trump administration. Don't worry though, New York, who has been trying to take Trump down for years now, is on the case ... to protect the people, of course. And Apple is caught in the middle.

    The credit limits are done on an individualized basis., which literally explains the outcome, but lets not let facts stand in the way of a good "sexist" story that can get click$ all over the internet.

    I would also even go so far as to wonder if Apple's choice of Goldman Sachs was .... influenced ... by the Trump administration.

    This is political. Make no mistake. If we were under the Obama administration, and Apple joined up with Citibank who basically picked Obama's administration picks, then this same story would never be allowed to gain traction.

    The real story here is how Apple increased the credit limit of a rich millionaire's wife, while millions of everyday people just have to live with their's because they aren't rich or powerful enough to get Apple attention.

  3. rosyna

    FWIW, the man that complained is worth $30 million, sold a house for $1.75 million (he doesn’t live in the US but has a green card) and tax returns have nothing to do with creditworthiness. (Banks aren’t legally allowed access to tax returns)

  4. jimchamplin

    I was honestly really surprised that Apple went with Goldman Sachs. They don’t have a great image with people who make less than a million a year. But I guess when you live in a world where everyone makes millions a year your worldview can’t be trusted by everyone else.

  5. Chris_Kez

    I think the broader issue here is lack of transparency. Apple or Goldman Sachs should be able to clearly explain exactly why his wife got a lower credit limit. An analyst there should have been able to pull up this application as soon as it became a PR issue, reviewed the numbers and clearly explained the apparent discrepancy. That would have been the end of the PR crisis at least. Is it possible they can't explain why because the algorithm is impenetrable? This is going to be a big problem in all kinds of areas.

    • wright_is

      In reply to Chris_Kez:

      The problem is the GS algorithm is proprietary and a trade secret, even the analysts don't get to see how they work.

      • red.radar

        In reply to wright_is:

        It is an interesting paradox. The algorithm is secret so the general public can not alter behavior thus souring the effectiveness. Also ones algorithm is a competitive advantage. However it’s an obvious shadow were things can lurk

      • Chris_Kez

        In reply to wright_is:

        And that is going to increasingly be a problem that people want fixed. As we run into (or uncover) more instances of bias and discrimination in algorithms all over the place, it will be harder for companies to stick with their default responses— ??‍♂️ or ?. At least I hope that is the case. I'm counting on you guys in Europe to get this rolling.

    • jimchamplin

      In reply to Chris_Kez:

      But what does that analyst say if the algorithm is actually designed to be biased?

  6. jbinaz

    "That’s obviously not what has happened here" is a big statement. Just because her credit score is higher doesn't mean her income is higher, and income will affect the credit limit, even in a community property state. I don't *think* I saw a mention of their relative incomes. If I did, I missed it. I'm too lazy to go back and look.

    I can have a $30K income, and a great credit score, but I'm sure as heck not going to be approved for as much as someone making $100K.

    Is it possible it's sexist? Yes. Do any of us know enough specifics to say that's why in this case (and similar cases mentioned in the tweets)? No.

    And, while it's stupid that I have to say this, if it is being based on gender, all other things equal, it's wrong.

    Sadly, we'll never get an answer.

  7. Daekar

    As long as men are a protected class of people too, I don't have a problem with this. The original situation makes no sense... If they're going to split things up like this, gender certainly shouldn't play a part.

    • jimchamplin

      In reply to Daekar:

      Men are a protected class of people?

      Clarify please.

      • Daekar

        In reply to jimchamplin:

        The New York Department of Financial Services was quoted in the article saying 'Any algorithm, that intentionally or not results in discriminatory treatment of women or any other protected class of people violates New York law.'" I'll be happy as long as everybody gets equal protection. If not... well, they're a right bunch of hypocrites.

  8. Patrick3D

    Laws were changed in 2009 & 2013 to require credit card companies to consider a person's ability (over the age of 21) to pay via any income they have access to rather than their individual income. Unless some people filed their application wrong it may be that Goldman Sachs were basing decisions on information provided by Apple which could have been individual specific, failing to take into account joint income. There is obviously something wrong in the pipeline that led to this but I don't expect it to have been intentional, simply something overlooked that needs to be corrected and a fine against Goldman Sachs for missing it.

    • jbinaz

      In reply to Patrick3D:

      When you say "filed their application wrong", are you saying that the individual would have to (and in this case didn't) disclose the other income (i.e. their spouses) for it to be considered? And if they don't, then it shouldn't be considered? (Not arguing with you at all, just curious as to what the law says, and how it works.)

    • jimchamplin

      In reply to Patrick3D:

      It’s possible that GS “accidentally didn’t get the memo.”

      • jbinaz

        In reply to jimchamplin:

        Why would a company whose main objective is to make money deny a higher credit limit to someone based on gender? A higher credit limit would allow for more transactions, which means more fees, which is more income, which can (but doesn't always) lead to more profit.

      • wright_is

        In reply to jimchamplin:

        Yes. Based on the discussion over on twit, I bought the Audible version of Weapons of math Destruction.

  9. red.radar

    It has nothing to do with gender discrimination. It’s the fact that the Apple Card doesn’t support multiple users like every other financial product.

    so when the Partner signs up their credit worthiness is judged based on their income. People who stay home and support the family unit are more likely to earn less income.