4 ms·

Disagree completely: Completely gender-oblivious algorithms correlated to actual profitability-differences between the two distinct borrowers could've caused t

by gojomo 7y ago

Disagree completely: Completely gender-oblivious algorithms correlated to actual profitability-differences between the two distinct borrowers could've caused the discrepancy, leaving nothing at all "ridiculously broken". That super-wealthy married partners don't always get the exact same credit line, when applying separately, is not particularly an issue of justice that "needs to be fixed". (If their finances are truly completely merged, the simple fix is: whoever gets the bigger credit line asks for a 2nd card on their account – though I see Apple Card may not yet offer that traditional option.) The mechanical assumption that married partners who apply separately must get the same credit line as each other is more patronizing, simple-minded, and disrepectful of their separate life-paths than the alternative. If wife JHH were not just rich but also famously so (within a certain industry), while conversely husband DHH was an "extremely private person" whose stated profession for the last few years (or maybe decade?) was "homemaker", I'd not be surprised for her to get (& deserve!) a credit line that's 20x his. And there’d be nothing “ridiculously broken” about that, either.

pwinnski 7y ago
Here is what you're missing: Given community-property laws, yes, married partners more than a couple of years into their marriage ought to always get the same results. If not, then something is broken, because things are being taken into account that shouldn't be, by law. Whether they practically share all finances on a daily basis or not, legally all of their property and income is shared.
- dominotw 7y ago
  > Whether they practically share all finances on a daily basis or not, legally all of their property and income is shared. This assumes that this the case for the lifetime of credit. Would we have to consider possibility of divorce given it happens at a high rate?
  - shanemlk 7y ago
    Typically their finances are still shared after divorce. No one "escapes" marriage.
- gojomo 7y ago
  That's not sufficient, unless community-property laws also perfectly predict both: (1) likelihood of repayment & ease of collection; and (2) net-profitability of a customer, after all fees, charge-reversals, support-costs, etc are considered. You're under the hypnotic sway of a legal fiction – "community property" – that paints an attractive, childlike simplicity over the situation that doesn't exist in reality. On the other hand, credit companies have real data about repayment rates, collection yield, & lifetime profitability. And even with the strongest possible community property laws, in the event of disputes (& divorces!), there's no magic wand a creditor can wave to costlessly collect from DHH if JHH defaults, or vice-versa. Even if the creditor is completely in-the-right, essentially, all they can do is send threatening letters & make adverse credit reports – which will have differential effectiveness against individuals despite any legal fiat claiming they're the same financial unit. And whether DHH would be on the hook for JHH's debts is murky & jurisdiction-dependent. Only some US states use "community property" rules to make spouses jointly responsible for each others' debt – and notably, Illinois (where DHH's partnership/CTO position in 37signals is based) isn't one of them. (See: <https://www.nolo.com/legal-encyclopedia/am-i-liable-my-spouses-credit-card-debt.html>. https://www.nolo.com/legal-encyclopedia/am-i-liable-my-spous...) Some reports also place DHH's residence in Spain – and according to <http://www.coupleseurope.eu/en/spain/topics/2-is-there-a-statutory-matrimonial-property-regime-and-if-so-what-does-it-provide/> http://www.coupleseurope.eu/en/spain/topics/2-is-there-a-sta..., there, "each spouse… is not responsible for the debts of the other". So what's the legal or statistical basis for your implication that "community property" makes them identical credit- and profitability- risks? (Has the couple even revealed that they're in a "community property" jurisdiction?)
  - shanemlk 7y ago
    This paints a great picture, thank you. You're not arguing whether she deserves it, but whether the law actually ties the two together properly. My point here however was to not only fix the algorithms but the laws too. Idealistic, I know.
    - gojomo 7y ago
      But what ideals require that spouses' assets & liabilities be even more strongly linked, and any offered credit always identical, and that it should be even easier for creditors to pursue people for their spouses' debts? (As you've not described these ideals, just asserted them, is the rationale religious in nature?) The fact that jurisdictions as varied as California, Illinois, most other US states, Spain, & much of the EU don't yet do that is evidence to me that any "idealistic" case driving such a determination mustn't be too widely held. And many couples prefer the separate treatment that's allowed them by current law. (Can you imagine the rage from a DHH-type, in mirror-universe where he and his wife had worked to maintain separate finances, but the law clipped his credit based on her income & repayment history? It'd be pretty similar!) Finally, even if the laws of every jurisdiction, from towns to the UN, required such a link – it still wouldn't be identically costly/profitable to lend to each spouse of a pair, or equivalently costly/easy to collect in difficult situations. Married partners don't become identical in earning power, conscientiousness, concern about their credit-rating, profitability, etc by either the act of marriage or any legislative fiat by people who wish that might be so. In matters of the heart, sure, defer to romantics who see marriage as a total, unquestionable unification of two people into one eternal unit. In actuarial matters of lifetime probability and credit risk, defer to the people who have the real data & money on-the-line: creditors.
- thesausageking 7y ago
  > married partners more than a couple of years into their marriage ought to always get the same results Credit card approvals are based on reported income to a large degree. It's likely that she put down a different number than him and/or the algorithm didn't properly account for their joint income. Also, if they were to divorce, given she's not working and he's a famous partner at a profitable company, his earning power is significantly higher than hers. It's not unreasonable to set his limit higher based on that.
  - shanemlk 7y ago
    Think bigger. Self reported income should not determine credit lines in the first place. This is a bigger problem.

by gojomo 7y ago

pwinnski 7y ago

Here is what you're missing: Given community-property laws, yes, married partners more than a couple of years into their marriage ought to always get the same results. If not, then something is broken, because things are being taken into account that shouldn't be, by law. Whether they practically share all finances on a daily basis or not, legally all of their property and income is shared.

dominotw 7y ago
> Whether they practically share all finances on a daily basis or not, legally all of their property and income is shared. This assumes that this the case for the lifetime of credit. Would we have to consider possibility of divorce given it happens at a high rate?
- shanemlk 7y ago
  Typically their finances are still shared after divorce. No one "escapes" marriage.
gojomo 7y ago
That's not sufficient, unless community-property laws also perfectly predict both: (1) likelihood of repayment & ease of collection; and (2) net-profitability of a customer, after all fees, charge-reversals, support-costs, etc are considered. You're under the hypnotic sway of a legal fiction – "community property" – that paints an attractive, childlike simplicity over the situation that doesn't exist in reality. On the other hand, credit companies have real data about repayment rates, collection yield, & lifetime profitability. And even with the strongest possible community property laws, in the event of disputes (& divorces!), there's no magic wand a creditor can wave to costlessly collect from DHH if JHH defaults, or vice-versa. Even if the creditor is completely in-the-right, essentially, all they can do is send threatening letters & make adverse credit reports – which will have differential effectiveness against individuals despite any legal fiat claiming they're the same financial unit. And whether DHH would be on the hook for JHH's debts is murky & jurisdiction-dependent. Only some US states use "community property" rules to make spouses jointly responsible for each others' debt – and notably, Illinois (where DHH's partnership/CTO position in 37signals is based) isn't one of them. (See: <https://www.nolo.com/legal-encyclopedia/am-i-liable-my-spouses-credit-card-debt.html>. https://www.nolo.com/legal-encyclopedia/am-i-liable-my-spous...) Some reports also place DHH's residence in Spain – and according to <http://www.coupleseurope.eu/en/spain/topics/2-is-there-a-statutory-matrimonial-property-regime-and-if-so-what-does-it-provide/> http://www.coupleseurope.eu/en/spain/topics/2-is-there-a-sta..., there, "each spouse… is not responsible for the debts of the other". So what's the legal or statistical basis for your implication that "community property" makes them identical credit- and profitability- risks? (Has the couple even revealed that they're in a "community property" jurisdiction?)
- shanemlk 7y ago
  This paints a great picture, thank you. You're not arguing whether she deserves it, but whether the law actually ties the two together properly. My point here however was to not only fix the algorithms but the laws too. Idealistic, I know.
  - gojomo 7y ago
    But what ideals require that spouses' assets & liabilities be even more strongly linked, and any offered credit always identical, and that it should be even easier for creditors to pursue people for their spouses' debts? (As you've not described these ideals, just asserted them, is the rationale religious in nature?) The fact that jurisdictions as varied as California, Illinois, most other US states, Spain, & much of the EU don't yet do that is evidence to me that any "idealistic" case driving such a determination mustn't be too widely held. And many couples prefer the separate treatment that's allowed them by current law. (Can you imagine the rage from a DHH-type, in mirror-universe where he and his wife had worked to maintain separate finances, but the law clipped his credit based on her income & repayment history? It'd be pretty similar!) Finally, even if the laws of every jurisdiction, from towns to the UN, required such a link – it still wouldn't be identically costly/profitable to lend to each spouse of a pair, or equivalently costly/easy to collect in difficult situations. Married partners don't become identical in earning power, conscientiousness, concern about their credit-rating, profitability, etc by either the act of marriage or any legislative fiat by people who wish that might be so. In matters of the heart, sure, defer to romantics who see marriage as a total, unquestionable unification of two people into one eternal unit. In actuarial matters of lifetime probability and credit risk, defer to the people who have the real data & money on-the-line: creditors.
thesausageking 7y ago
> married partners more than a couple of years into their marriage ought to always get the same results Credit card approvals are based on reported income to a large degree. It's likely that she put down a different number than him and/or the algorithm didn't properly account for their joint income. Also, if they were to divorce, given she's not working and he's a famous partner at a profitable company, his earning power is significantly higher than hers. It's not unreasonable to set his limit higher based on that.
- shanemlk 7y ago
  Think bigger. Self reported income should not determine credit lines in the first place. This is a bigger problem.