Dive Brief:

• Goldman Sachs did not intentionally discriminate against women in its credit decisions regarding the Apple Card, the New York Department of Financial Services (NYDFS) said in a report Tuesday.
• Deficiencies in customer service and a perceived lack of transparency, however, undermined consumer trust in fair credit decisions, the agency said.
• Since the investigation launched in November 2019, Goldman and Apple have aimed to improve transparency and help denied applicants boost their credit, and the companies altered a policy that required approved applicants to wait six months before appealing credit terms, the department said.

Dive Insight:

NYDFS’s investigation stemmed from a series of complaints on social media from customers claiming the then-3-month-old Apple Card granted women lower credit limits than men. Software developer David Heinemeier Hansson, for example, tweeted that the credit line Goldman offered him on his Apple Card was 20 times higher than what his wife was offered, even though Hansson and his wife file joint tax returns and he has a lower credit score than she.

"Goldman and Apple are delegating credit assessment to a black box," Hansson told Bloomberg in 2019. "It’s not a gender-discrimination intent but it is a gender-discrimination outcome."

NYDFS said Tuesday it found no evidence of disparate impact in Goldman’s credit decisions — applications from women and men with similar credit characteristics generally had similar outcomes — and the decisions were "explainable, lawful, and consistent with the Bank’s credit policy."

However, Linda Lacewell, the regulator’s superintendent, said the case should serve as a reminder that, almost five decades after the Equal Credit Opportunity Act, credit-scoring models and anti-discrimination laws need a refresh.

"Consumer frustration with the Apple Card policy of not permitting an account holder to add an authorized user drew attention to the following: a person who relies on a spouse's access to credit, and only accesses those accounts as an authorized user, may incorrectly believe they have the same credit profile as the spouse," Lacewell said in a press release. "This is one part of a broader discussion we must have about equal credit access."

Goldman, in a statement Tuesday, said it remains committed to providing fair and equal access to credit. "We appreciate the Department of Financial Services’ thorough investigation and welcome its conclusion of no fair lending violations," spokesperson Patrick Scanlan told Bloomberg.

NYDFS said it reviewed thousands of pages of records, written responses and interviews of Apple Card applicants and witnesses in its investigation, and analyzed underwriting data for roughly 400,000 New Yorkers.