4 ms·

I suspected the root cause of this situation was due to the income signal, not credit score. I bet that Goldman Sachs is not correctly accounting for California

by teej 7y ago

I suspected the root cause of this situation was due to the income signal, not credit score. I bet that Goldman Sachs is not correctly accounting for California community property laws, where 50% of the household income is hers. This seems like the exact type of oversight that is: - Not “technically” using gender as a signal - Ends up practically causing gender-based unfairness - Is simply bad data and I would consider a bug - Is something customer service is not going to be helpful with I’m glad this issue came to light. I hope it leads to productive conversations about black-box algorithms and underwriting.

sova 7y ago
You make fair points, but the conclusive "There's no endpoint to meet your request" is simply unacceptable. Are Profit margins maximized by inconveniencing real humans due to lack of endpoint management/assessment? Just because a computer stands between me and your business doesn't mean your business can slack where classical models may not. I find that all the large tech companies have an appalling lack of technical support or assistance available, and not only that, but there's no way for a smart person to reach someone with a real notification. You have to tweet about it to get any fairness. Apple decides to become a bank. How about decide to become a customer facing organization first? /rant
soneca 7y ago
That's her point about diverse teams build better products. Bugs that affect the team building it are much more likely to be found and fixed than bugs that do not affect anyone in the builder's social circle.
silencio 7y ago
I'm pretty sure household income is a federal thing coming from the Credit Card Act of 2009, not just CA community property laws. Every time I apply for a credit card it's been pretty clear they want household and nonwage income, not a solo salary. Either way, it's baffling and I think this explains why my wife got such a piss poor credit limit on her Apple Card, something like 1/5 of another line of credit she has. I didn't even bother applying after seeing what she got. The joke...? is on us though because we're both female.
- teej 7y ago
  I assume they pull income from a third party source to supplement the self-reported income. The third party income would be the source of the discrepancy.
madamelic 7y ago
> I bet that Goldman Sachs is not correctly accounting for California community property laws So what you are saying is the GS is conducting banking without following all regulations. Color me surprised. I am so tired of financial companies, big and small, flouting regulations because they think they know better. Regulations, especially financial ones, exist for a reason.
spamizbad 7y ago
It seems weird that firm like Goldman could miss the details of a California law. California has a bigger population than the 21 other states combined.
berberous 7y ago
I’m curious how much income really matters for credit decisions since I thought it was typically self-reported and not verified (although perhaps they also use third party non-verified sources to increase confidence), but to the extent it is a factor, I wouldn’t give much weight to living in a community property state either: 1. You can effectively opt out of community property rules via a pre-nup. 2. You can move states to a non-CP state. Those are two very hard things to control against, so it makes sense to just discount them. If that is what’s going on here, it’s not really gender-biased in my mind; especially in today’s world, an increasing number of women earn more than their male counterparts, so it’s just biased towards those with high income.
tzs 7y ago
> I bet that Goldman Sachs is not correctly accounting for California community property laws, where 50% of the household income is hers. Note that this is just in the absence of a prenuptial agreement that states a different allocation. I've never been married, nor helped any married person apply for any kind of loan or credit, so have no idea what extra information is asked for if you check the "married" box instead of the "single" box on an application. Do the financial institutions ask married people about any prenups they are under?
- filoleg 7y ago
  Pre-nups in the US (maybe elsewhere too, but I am not knowledgeable enough to talk about other countries in this aspect) are not some magic wands that can stop the income earned by the household from being shared. Best use case for pre-nups is mostly protecting the assets you had before marriage. Of course, you can write whatever you want in it, including something like "in case of a divorce, person X gets all of the earnings they accumulated during the marriage, while person Y gets theirs, no 50/50 split", but it is guaranteed to be thrown away by courts during the divorce proceedings. tl;dr: pre-nups won't allow you to avoid splitting your earnings made during the course of marriage 50/50.
  - tzs 7y ago
    Nolo.com [1], Findlaw.com [2], and LegalZoom [3], and Legal Seagull [4] seem to suggest otherwise. [1] https://www.nolo.com/legal-encyclopedia/prenuptial-agreements-and-inheritance-rights.html https://www.nolo.com/legal-encyclopedia/prenuptial-agreement... [2] https://family.findlaw.com/marriage/what-can-and-cannot-be-included-in-prenuptial-agreements.html https://family.findlaw.com/marriage/what-can-and-cannot-be-i... [3] https://www.legalzoom.com/knowledge/prenuptial-agreement/topic/prenuptial-community-property-distribution https://www.legalzoom.com/knowledge/prenuptial-agreement/top... [4] https://thelegalseagull.com/blogs/news/do-i-need-a-prenup-marriage-and-money https://thelegalseagull.com/blogs/news/do-i-need-a-prenup-ma...
    - filoleg 7y ago
      I have just read through 3 out of 4 links you posted, and I cannot find anything that disproves my earlier point. Can you cite a specific part that you feel supports your point? The closest I could think of was from LegalZoom (3rd link), and it says: "In equitable distribution states, property acquired during the marriage belongs to the spouse who earned it. In a divorce, the property will be divided between the spouses in a fair and equitable manner. There is no set rule for determining who receives what or how much, but a variety of factors are considered. For example, the court may look to the relative earnings contribution of the spouses, the value of one spouse staying at home or raising the children, and the earning potential of each. Often, each spouse will receive one-third to two-thirds of the marital property." But that doesn't seem to disprove my point, because it still has the "In a divorce, the property will be divided between the spouses in a fair and equitable manner". So even if technically yes, the property you individually acquired during the course of marriage is considered yours, it will still be divided between both spouses in a "fair and equitable manner".

by teej 7y ago

sova 7y ago

You make fair points, but the conclusive "There's no endpoint to meet your request" is simply unacceptable. Are Profit margins maximized by inconveniencing real humans due to lack of endpoint management/assessment? Just because a computer stands between me and your business doesn't mean your business can slack where classical models may not. I find that all the large tech companies have an appalling lack of technical support or assistance available, and not only that, but there's no way for a smart person to reach someone with a real notification. You have to tweet about it to get any fairness. Apple decides to become a bank. How about decide to become a customer facing organization first? /rant

soneca 7y ago

That's her point about diverse teams build better products. Bugs that affect the team building it are much more likely to be found and fixed than bugs that do not affect anyone in the builder's social circle.

silencio 7y ago

I'm pretty sure household income is a federal thing coming from the Credit Card Act of 2009, not just CA community property laws. Every time I apply for a credit card it's been pretty clear they want household and nonwage income, not a solo salary. Either way, it's baffling and I think this explains why my wife got such a piss poor credit limit on her Apple Card, something like 1/5 of another line of credit she has. I didn't even bother applying after seeing what she got. The joke...? is on us though because we're both female.

teej 7y ago
I assume they pull income from a third party source to supplement the self-reported income. The third party income would be the source of the discrepancy.

madamelic 7y ago

> I bet that Goldman Sachs is not correctly accounting for California community property laws So what you are saying is the GS is conducting banking without following all regulations. Color me surprised. I am so tired of financial companies, big and small, flouting regulations because they think they know better. Regulations, especially financial ones, exist for a reason.

spamizbad 7y ago

It seems weird that firm like Goldman could miss the details of a California law. California has a bigger population than the 21 other states combined.

berberous 7y ago

I’m curious how much income really matters for credit decisions since I thought it was typically self-reported and not verified (although perhaps they also use third party non-verified sources to increase confidence), but to the extent it is a factor, I wouldn’t give much weight to living in a community property state either: 1. You can effectively opt out of community property rules via a pre-nup. 2. You can move states to a non-CP state. Those are two very hard things to control against, so it makes sense to just discount them. If that is what’s going on here, it’s not really gender-biased in my mind; especially in today’s world, an increasing number of women earn more than their male counterparts, so it’s just biased towards those with high income.

tzs 7y ago

> I bet that Goldman Sachs is not correctly accounting for California community property laws, where 50% of the household income is hers. Note that this is just in the absence of a prenuptial agreement that states a different allocation. I've never been married, nor helped any married person apply for any kind of loan or credit, so have no idea what extra information is asked for if you check the "married" box instead of the "single" box on an application. Do the financial institutions ask married people about any prenups they are under?

filoleg 7y ago
Pre-nups in the US (maybe elsewhere too, but I am not knowledgeable enough to talk about other countries in this aspect) are not some magic wands that can stop the income earned by the household from being shared. Best use case for pre-nups is mostly protecting the assets you had before marriage. Of course, you can write whatever you want in it, including something like "in case of a divorce, person X gets all of the earnings they accumulated during the marriage, while person Y gets theirs, no 50/50 split", but it is guaranteed to be thrown away by courts during the divorce proceedings. tl;dr: pre-nups won't allow you to avoid splitting your earnings made during the course of marriage 50/50.
- tzs 7y ago
  Nolo.com [1], Findlaw.com [2], and LegalZoom [3], and Legal Seagull [4] seem to suggest otherwise. [1] https://www.nolo.com/legal-encyclopedia/prenuptial-agreements-and-inheritance-rights.html https://www.nolo.com/legal-encyclopedia/prenuptial-agreement... [2] https://family.findlaw.com/marriage/what-can-and-cannot-be-included-in-prenuptial-agreements.html https://family.findlaw.com/marriage/what-can-and-cannot-be-i... [3] https://www.legalzoom.com/knowledge/prenuptial-agreement/topic/prenuptial-community-property-distribution https://www.legalzoom.com/knowledge/prenuptial-agreement/top... [4] https://thelegalseagull.com/blogs/news/do-i-need-a-prenup-marriage-and-money https://thelegalseagull.com/blogs/news/do-i-need-a-prenup-ma...
  - filoleg 7y ago
    I have just read through 3 out of 4 links you posted, and I cannot find anything that disproves my earlier point. Can you cite a specific part that you feel supports your point? The closest I could think of was from LegalZoom (3rd link), and it says: "In equitable distribution states, property acquired during the marriage belongs to the spouse who earned it. In a divorce, the property will be divided between the spouses in a fair and equitable manner. There is no set rule for determining who receives what or how much, but a variety of factors are considered. For example, the court may look to the relative earnings contribution of the spouses, the value of one spouse staying at home or raising the children, and the earning potential of each. Often, each spouse will receive one-third to two-thirds of the marital property." But that doesn't seem to disprove my point, because it still has the "In a divorce, the property will be divided between the spouses in a fair and equitable manner". So even if technically yes, the property you individually acquired during the course of marriage is considered yours, it will still be divided between both spouses in a "fair and equitable manner".