Goldman Cleared of Bias in New York Review of Apple Card

Goldman Sachs Group Inc. didn’t use discriminatory practices when deciding whether to extend credit to prospective customers of its Apple Card, the New York State Department of Financial Services said.

A review by the regulator found no evidence of intentional bias against women, the department said in a statement Tuesday. It also found no evidence that the lender’s credit decisions had a disparate impact on certain groups of people.

Goldman’s credit card, a venture with Apple Inc. unveiled with much fanfare in 2019, came under fire months after its launch, with customers complaining on Twitter that women were granted lower credit limits than men. Married couples also complained that husbands were granted far higher spending limits than their wives. The viral tweets prompted New York’s review of Goldman’s practices, and launched a public discussion about the potentially quiet ways in which lenders may unintentionally discriminate against certain people through machine-driven credit decisions.

“While we found no fair lending violations, our inquiry stands as a reminder of disparities in access to credit that continue nearly 50 years after the passage of the Equal Credit Opportunity Act,” Superintendent of Financial Services Linda A. Lacewell said in the statement. “This is one part of a broader discussion we must have about equal credit access.”

Lacewell’s department faulted Goldman for deficiencies in customer service and said that a perceived lack of transparency undermined consumer trust. “The problems might have been prevented by better management of the product’s roll-out,” the regulator said in its report.

‘Thorough Investigation’

“We appreciate the Department of Financial Services’ thorough investigation and welcome its conclusion of no fair lending violations,” Goldman spokesperson Patrick Scanlan said in a statement. “We remain committed to providing fair and equal access to credit.”

The regulator in November 2019 announced it would open an inquiry into Goldman’s credit-card practices after a viral tweet from a tech entrepreneur alleged gender discrimination in Apple Card’s algorithms for determining credit limits. An analysis of underwriting data for almost 400,000 New York applicants for the card found no violations of fair lending laws, according to the report.

Data on households’ credit histories that lenders use when deciding whether to extend credit can sometimes reflect historical or latent bias, the regulator said. “The data used by creditors in developing and testing a model can perpetuate unintended biased outcomes,” it said in the report.

While laws such as the Equal Credit Opportunity Act are believed to have reduced bias and broadened access to credit, the New York regulator said, “women and minorities in the United States continue to qualify generally for less credit and at higher cost than White men.”

©2021 Bloomberg L.P.

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