New York State Department of Financial Services has opened an investigation into Goldman Sachs' credit card policies, after complaints of gender discrimination towards assigning credit card limits for Apple Card. The issue was initially raised by David Heinemeier Hansson, creator of Ruby on Rails, who tweeted that his wife got an extremely low credit card limit. As per the screenshots shared by David, his wife got a credit card limit of just $57.24.
According to David, his wife has a good credit score but he got a 20 times higher credit card limit than his wife. Other Twitter users also chimed in with their experiences on how they were able to get better credit card limits on their Apple Card, despite having a lower credit score than their spouses. Even Apple co-founder Steve Wozniak jumped in to share his experience.
The same thing happened to us. I got 10x the credit limit. We have no separate bank or credit card accounts or any separate assets. Hard to get to a human for a correction though. It's big tech in 2019.
— Steve Wozniak (@stevewoz) November 10, 2019
It seems that the algorithms that have been programmed to assign credit card limits based on a person's details like credit score and earnings have some sort of gender bias. Whether this is intentional or not, it will be found through the investigation that has been started by the Wall Street regulator New York State Department of Financial Services. The following statement was shared by the regulator with Bloomberg:
“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.”
It is important to note that there are a lot of factors that go into deciding whether a person is eligible for a credit card and what limit they can get. It depends on income, loans, credit history and more. Just because someone has a higher credit score does not mean that they would automatically qualify for a better limit.
This is what Apple's support page says regarding the credit limit:
To determine your initial credit limit, Goldman Sachs uses your income and the minimum payment amounts associated with your existing debt to assess your ability to pay.
In addition, Goldman Sachs uses many of the same factors that are used to assess whether your application is approved or declined, including your credit score and the amount of credit you utilize on your existing credit lines.
These are the reasons that might have an impact on the credit limit:
- If you're behind on debt obligations or have previously been behind
- If you have negative public records
- If you're heavily in debt or your income is insufficient to make debt payments
- If you frequently apply for credit cards or loans
- If your credit score is low
Interestingly, some users shared that the gender discrimination issue is not unique to Apple Card. It happens with credit cards from traditional banks too, despite higher salaries for females.
This isn’t unique to Apple. My wife earns 4x what I do and my credit limit is 10x hers with traditional banks. We write it off to her being on a green card but that’s probably not it.
— Ed Grosvenor (@MaybeEdward) November 7, 2019
This doesn't seem restricted to Apple. My wife has earned more than me overall, and still her credit limit is way lower over every card. I'm a green card holder and she's a US citizen. I'd put it down to randomness or lack of data in their assessments, but now I'm suspicious...
— Will James (@wiggzz) November 8, 2019
In the end, David's wife got a credit increase once the issue was raised to Apple and Goldman Sachs. GS Bank Support also responded to David on Twitter that sex/gender and other prohibitions do not impact a person's creditworthiness when making credit decisions.
We take these concerns very seriously. Please know that Goldman Sachs will never consider sex/gender or any other prohibited bases when making credit decisions. We’d like to discuss this with you. Can you please direct message us?
— GS Bank Support (@gsbanksupport) November 7, 2019
Here is the tweet that started it all. Click through to read the whole thread, it is very interesting.
The @AppleCard is such a fucking sexist program. My wife and I filed joint tax returns, live in a community-property state, and have been married for a long time. Yet Apple’s black box algorithm thinks I deserve 20x the credit limit she does. No appeals work.
— DHH (@dhh) November 7, 2019
It might turn out that it is not just Apple Card that is a 'sexist program' - the issue might be more widespread than it seems. It is also Goldman Sachs, not Apple, who is responsible for Apple Card's credit limits. Despite this reported issue, customers have borrowed $786 million so far using Apple Card in the United States.
We will keep you updated on the latest news from this investigation.