New York Department of Financial Services Finds Goldman Sachs Did Not Violate Fair Lending Laws in Apple Card Cases

In November 2019, David Heinemeier Hansson wrote on Twitter about a huge discrepancy between the credit offered to him and his wife when each applied for an Apple Card. Steve Wozniak echoed those complaints, and New York’s Department of Financial Services opened an investigation.

Today, the Department announced its findings:

In the course of the investigation, consumers expressed the belief that they should have received the same Apple Card offers as their spouses because they shared bank accounts and other assets. For example, consumers voiced the belief that if they shared credit cards with spouses, even if only as authorized users, they were entitled to the same credit terms as spouses. In reality, however, underwriters are not required to treat authorized users the same as account holders, and may consider many other factors.

In terms of gender, the Department found, based on its data analysis, that Apple Card applications from women and men with similar credit characteristics generally had similar outcomes. For all consumers who reported concerns about their Apple Card credit application outcomes to the Department, evidence showed that those decisions were explainable, lawful, and consistent with the Bank’s credit policy. However, the Department concluded, deficiencies in customer service and a perceived lack of transparency undermined consumer trust in fair credit decisions.

From the report (PDF):

Consumers also complained to the Department of a lack of transparency in the process for determining credit terms. Although the law requires lenders to explain underwriting decisions to applicants only in the event of a denial of credit, the Department notes that transparency as to account holders’ credit terms supports consumer trust. The Consumer suggested on Twitter that the Bank used a “black box” algorithm that produced unexplainable outcomes. Although the Bank was able to explain, at the request of the Department, the credit decisions for all of the individuals who filed complaints, lack of transparency to the complainants themselves in this case seemed to produce confusion that could have been mitigated.

The report cites the Path to Apple Card program as an example of better transparency.

The problems experienced by Hansson and Wozniak — and, presumably, plenty of other couples who applied for the Apple Card — seem to be less about specific discriminatory treatment, according to this report. Rather, they reflect the financial industry’s secrecy and the murky world of credit scores. Apple chose to enter this miserable marketplace, but at least it appears to be trying to do something to improve it.