Tags: 2020 Elections | elizabeth warren | apple | card | bias

Elizabeth Warren Ramps Up Attacks On Apple Card Bias Claims

Elizabeth Warren Ramps Up Attacks On Apple Card Bias Claims
(Richard Koele/Dreamstime)

Tuesday, 26 November 2019 11:09 AM

Democratic Senators Elizabeth Warren and Sherrod Brown want the Consumer Financial Protection Bureau to address claims of bias against women applying for the Apple Card.

Warren, a top candidate for her party’s presidential nomination, and Brown, the ranking Democrat on the Banking Committee, wrote to Kathy Kraninger, director of the consumer agency, asking for more information about how the agency is monitoring the lending practices of Goldman Sachs Group Inc., which underwrites the credit card for Apple Inc.

It’s not clear how the agency is looking into financial companies that are new to consumer lending, like Goldman, and whether its current structure and leadership are making it easier for discriminatory products to go to market, the senators wrote.

“Public reports raise questions on whether there is a pattern of sex discrimination in the underwriting of the Apple Card, and underscore the importance of the CFPB adequately monitoring the lending practices of financial institutions, including those like Goldman Sachs, that are new to the consumer lending space,” Warren and Brown said in the letter, which was dated Nov. 25.

Goldman (GS) and Apple (AAPL) were hit with waves of criticism by politicians and others after prominent Silicon Valley executives complained earlier this month about receiving significantly higher credit limits on their Goldman-backed Apple credit cards than their wives, despite having similar incomes and credit scores.

That has revived long-held concerns about whether algorithms illegally treat borrowers differently because of race, gender or other factors. The New York State Department of Financial Services has since begun an investigation.

At the same time, Democrats have repeatedly attacked Kraninger, President Donald Trump’s choice to run the consumer agency, which was created by the 2010 Dodd-Frank Act as a response to the financial crisis. Long before she was elected, Warren had advocated the establishment of a consumer protection bureau and helped bring about the CFPB.

Kraninger replaced Mick Mulvaney, now the acting White House chief of staff, who has been accused by Democrats and activists of gutting the agency. No Democrats voted in favor of her confirmation.

“Under your leadership, the CFPB has shown little willingness to fulfill its statutory mandate to enforce fair lending laws,” the senators said in the letter.

The public relations debacle around the Apple Card began earlier this month when David Heinemeier Hansson, a software developer, said he was allowed to borrow 20 times as much as his wife, even though he has a lower credit score and they reported the same income and share finances.

Apple’s own co-founder, Steve Wozniak, tweeted that he got 10 times the credit limit his wife received even though the couple shares bank and credit card accounts.

Warren has previously weighed in as well, slamming the bank for its response to the issue, and said if Goldman can’t show that its algorithm doesn’t restrict women’s access to credit, it should ditch it.

Goldman has responded that it doesn’t take gender or marital status into account when determining creditworthiness, and the bank said it will introduce the ability for household members to share an Apple Card credit line. The bank also said it welcomes a discussion of the topic with policy makers and regulators.

“The risks of unaccountable, black-box algorithms shouldn’t be underestimated,” Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said earlier this month.

Warren and Brown asked whether the CFPB has conducted supervisory exams of Goldman, and whether recent changes to the structure of the agency affects how regulators are policing new technologies. The lawmakers have requested the CFPB to respond by Dec. 9.

© Copyright 2020 Bloomberg News. All rights reserved.

   
1Like our page
2Share
StreetTalk
Democratic Senators Elizabeth Warren and Sherrod Brown want the Consumer Financial Protection Bureau to address claims of bias against women applying for the Apple Card.
elizabeth warren, apple, card, bias
595
2019-09-26
Tuesday, 26 November 2019 11:09 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved