Apple co-founder and Silicon Valley legend Steve Wozniak claimed recently that the algorithm of Apple’s new credit card gave his wife a much lower credit limit than him, piling on to criticism of Apple and Goldman Sachs’ new credit offering.
Apple’s new credit card, unsurprisingly named the Apple Card, has caused a new wave of debate surrounding gender discrimination. Reuters reports that the issue started on Thursday after entrepreneur David Heinemeier Hansson claimed that the Apple Card gave him 20 times the credit limit his wife received. Now, Apple co-founder Steve Wozniak has stated that his wife experienced similar results.
The Apple Card was launched in partnership with Goldman Sachs which has claimed that applicants were evaluated independently according to income and creditworthiness, with factors such as personal credit scores and personal debt taken into account. The bank stated that it was possible for two family members to receive very different credit decisions but added: “We have not, and will not, make decisions based on factors like gender.”
In reply to Hansson’s initial tweet about the issue, Wozniak stated that he had a similar experience and got 10 times more credit on the card compared with his wife. Wozniak stated: “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.”
New York’s Department of Financial Services stated recently that it was starting an inquiry into Goldman Sachs’ credit card practices. Linda Lacewell, the superintendent of the New York State Department of Financial Services, wrote in a blog post: “New York law prohibits discrimination against protected classes of individuals,” she added: “We know the question of discrimination in algorithmic decisioning also extends to other areas of financial services.”
Apple did not respond to Reuters request for comment. Breitbart News financial editor John Carney wrote an article about this issue recently, stating that it was unlikely that Apple or Goldman Sachs were discriminating based on gender. Carney wrote:
I hate to be the one who tells you this but Apple and Goldman do not care about you. They do not care about your hopes, your dreams, your philosophy, your politics, or your gender. They’ll use whatever pronouns you ask them to.
We are all just future income streams to them. That’s it. Dollars divided by time. A discount rate, a probability of default, and a regulatory capital charge.
Neither company has a particular interest in rationing credit, apart from some attempt to estimate the maximum credit they can provide and still get paid back at an acceptable rate. They do not really care if you, as an individual, wind up paying them back. They just want to get paid back at a rate that means making short-term consumer loans is slightly profitable enough to cover their cost of capital.
They are constrained by regulations that penalize them for supplying what the government sees as too much credit to people whose lives might be ruined by over-indulgence in borrowing. Those include a myriad of rules from the Consumer Finance Protection Bureau, capital regulation from the FDIC and the Federal Reserve, and state laws on credit.
Think about it this way. If there were a team at Goldman Sachs who developed a computer program that gave too little credit to women, what are the odds that another team at Goldman wouldn’t have figured out how to make more money by providing the appropriate level of credit? Is everyone there too sexist to want to make money by lending appropriately to women customers?
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