Goldman Sachs’ credit card policies were called into question when Basecamp designer David Heinemeier Hansson and Apple co-founder Steve Wozniak claimed that their female partners received lower Apple Card credit limits simply for being women. But a recently concluded New York State Department of Financial Services investigation has found Apple’s banking partner did not discriminate based on sex (via Bloomberg).
NYSDFS investigators conducted a statistical analysis of almost 400,000 New York applicants that showed that the models and algorithms Goldman Sachs uses to filter applicants “did not consider prohibited characteristics of applicants and would not produce disparate impacts”. The regulator also stressed that the idea that spouses with shared finances would receive the same credit terms was a common misconception. Normal guidelines like credit history or unpaid debt were what determined whether or not a spouse received a higher limit.
For each cardholder that complained, the NYSDFS was also able to acquire specific justifications from Goldman Sachs for each decision:
In each instance, the Bank was able to identify the factors that led to the credit decisions, such as credit score, indebtedness, income, credit utilization, missed payments, and other credit history elements. These decisions appeared to be consistent with the Bank’s credit policy, and none of the factors identified was an unlawful basis for a credit determination.
Even without a case for sexual or marital discrimination, the NYSDFS was critical of Goldman Sachs’ response to its concerned customers. Technically, banks only have to disclose elements of their credit policy when they deny someone a line of credit, but the NYSDFS says that Goldman Sachs could have had a plan in place to deal with customer confusion and make it easier for them to appeal their credit limits. In the initial rush to launch the Apple Card, the bank had done neither.