Sens. Warren, Brown ramp up attacks on Apple Card over bias claims

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Democratic Senators Elizabeth Warren and Sherrod Brown want the Consumer Financial Protection Bureau to examine allegations of bias against women who applied for an Apple credit card underwritten by Goldman Sachs.

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 Goldman's lending practices.

"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 and Apple were hit with waves of criticism by politicians 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.

Goldman has said 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 policymakers and regulators.

Democrats have repeatedly attacked Kraninger, President Donald Trump's choice to run the CFPB, which was created by the 2010 Dodd-Frank Act as a response to the financial crisis. Long before she was elected to Congress, Warren advocated for the establishment of a consumer protection bureau and helped bring the CFPB into existence.

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 Kraninger's 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.

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.

Bloomberg News
Gender discrimination Elizabeth Warren Sherrod Brown Kathy Kraninger Apple CFPB Goldman Sachs
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