Can we all calm down about Apple Card’s “gender bias”

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A furore has erupted in recent days on the back of this tweet from prominent web developer and businessman David Heinemeier Hansson (please cover your eyes if you’re not into profanity with your breakfast): 

The tweet referred to an application for the new Apple Card — which is issued and developed by Goldman Sachs — by Hansson’s wife, who was offered one-twentieth of the credit limit he had been offered. It was followed by a very long thread, in which Hansson fumes:

I’m surprised that they even let her apply for a card without the signed approval of her spouse? I mean, can you really trust women with a credit card these days??!

And then (profanity again, soz): 

It gets even worse. Even when she pays off her ridiculously low limit in full, the card won’t approve any spending until the next billing period. Women apparently aren’t good credit risks even when they pay off the fucking balance in advance and in full.

(Perhaps women/wives aren’t capable of creating their own tweetstorms about their experiences either and need their hubbies to do it for them? Just a thought.) 

First, the internet responded: the tweet went viral, getting almost 30,000 likes and almost 10,000 retweets, and found itself splashed all over online media. 

Next, it was the turn of the financial regulators. The New York Department of Financial Services said it would be conducting an investigation “to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex”. 

And then, it was the turn of Democratic presidential hopeful and woke-vote-seeker Elizabeth Warren. In an interview with Bloomberg published late on Wednesday she criticised the bank, saying:

Yeah, great. So let’s just tell every woman in America, ‘You might have been discriminated against, on an unknown algorithm, it’s on you to telephone Goldman Sachs and tell them to straighten it out’… Sorry guys, that’s not how it works.

Umm, it might be time to take a step back or three. We know it’s trendy to talk about bias in AI and all, but where did this idea that it was Hansson’s gender, and not any of the other criteria that might have separated her from her husband according to this particular algorithm — like, for example, her credit history — come from? You can’t just decide this is a sexist algorithm based on this one event. 

Apart from anything else, it would actually make little sense for Goldman to be offering men better credit terms on the basis that they have a Y chromosome. Recent research has shown that women tend to have slightly better credit ratings than men (though men, funnily enough, are more likely to believe they have good credit scores, according to the research). 

Goldman has responded by saying that it would be difficult to discriminate based on gender given that they don’t actually know the applicant’s gender during the application process:

It does kinda feel like we live in a time of some considerable lunacy when a regulator makes a decision that it’s time to investigate something based on the fact that it’s gone viral on the internet, rather than on the basis of some convincing evidence of actual wrongdoing. 

The part of the debacle that is more worrying — and which to be fair to Warren she did also flag — is that Goldman doesn’t seem to be able to explain what its own algorithms are in fact up to. In one of his subsequent tweets, Hansson said customer service employees weren’t “authorised” to explain the credit assessment process. And Goldman telling customers happily that “we want to hear from you” if you don’t think you’ve been scored correctly doesn’t exactly instil confidence that its algorithms have any clue about what they’re doing. 

Goldman, it appears, is finding that there are many third rails to avoid in consumer finance. But people should perhaps be less concerned about the “gender discrimination” stuff, and more concerned that the bank only seems (according to its application form) to want to give its market-leading savings account rates to arms dealers, gambling tycoons and crypto bros (a fact that was first picked up on by Alphaville friend and FT colleague Rob Smith): 

Related links:
Elizabeth Warren Slams Goldman Over Apple Card Bias Furor – Bloomberg
Viral Tweet About Apple Card Leads to Goldman Sachs Probe – Bloomberg
What sort of professions deserve high-street beating rates from Goldman’s Marcus? – FT Alphaville

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