Finance

Goldman is looking to fix the flaw that has Apple Card users claiming gender discrimination

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Key Points
  • In most cases, the Apple Card issue stems from it being only for individual accounts, not joint accounts shared by a household, according to Goldman spokesman Andrew Williams.
  • One solution: The bank is actively exploring ways to allow users to share their Apple Card with family members.
  • Goldman was aware of the potential issue before it rolled out the Apple Card in August, but it opted to go with individual accounts because of the added complexity of dealing with co-signers or other forms of shared accounts, according to a person with knowledge of the matter.
David Solomon, chief executive officer of Goldman Sachs, speaks during the Milken Institute Global Conference in Beverly Hills, April 29, 2019.
Patrick T. Fallon | Bloomberg | Getty Images

Goldman Sachs is looking into ways that family members can share a single Apple Card account after a few high-profile users complained that their spouses were discriminated against.

The controversy surfaced over the weekend after a tech entrepreneur tweeted that he got 20 times the credit limit that his wife got, prompting Apple co-founder Steve Wozniak to add that "the same thing happened" to him.

In most cases, the issue stems from the Apple Card being only for individual accounts, not joint accounts shared by a household, according to Goldman spokesman Andrew Williams.

"As with any other individual credit card, your application is evaluated independently," Williams said in a statement. "We look at an individual's income and an individual's creditworthiness, which includes factors like personal credit scores, how much personal debt you have, and how that debt has been managed."

That setup makes it "possible for two family members to receive significantly different credit decisions," Williams said. He added that the bank is actively exploring ways to allow users to share their Apple Card with family members.

Goldman was aware of the potential issue before it rolled out the Apple Card in August, but it opted to go with individual accounts because of the added complexity of dealing with co-signers or other forms of shared accounts, according to a person with knowledge of the matter.

The Apple Card is directly linked to a user's iPhone, where the application process happens, helping explain the appeal of individual accounts. In some cases, shared accounts could lead to legal disputes over who must repay debts if a couple separates.

While Goldman is adamant that it never made underwriting decisions based on gender — there is no field for gender in the card's application process — the episode exposes the pitfalls as more and more decisions about credit, health care and hiring are made by algorithms.

For instance, in 2015 Amazon scrapped an automated hiring tool after it realized that the data sets it used to train the program meant that it inadvertently preferred male job candidates.

New York's Department of Financial Services is looking into Goldman's credit card department to determine whether any of the state's laws were violated, Bloomberg reported.

The House Financial Services Committee held hearings in June on instances of bias against certain groups within algorithms, even when there was no explicit intent to discriminate.

With reporting from CNBC's Wilfred Frost. 

Todd Haselton | CNBC