Warren, Brown call for greater enforcement of fair lending laws after Goldman gender discrimination allegations

Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) are asking the Consumer Financial Protection Bureau (CFPB) for information about its enforcement of fair lending laws in light of reports that women who apply for Goldman Sachs’s Apple Card receive worse terms than men.

The Democratic senators, in a letter addressed to CFPB Director Kathleen Kraninger, asked for a clear breakdown of how the CFPB handles determining whether companies are complying with creditor discrimination laws.

The letter asks about how the bureau handles new lenders or products, specifically whether the CFPB factors in the additional risk for them. 

The senators write that they are worried that adjustments to the structure of the bureau under the Trump administration have affected its oversight abilities. 

“We’re concerned that this new structure, where many offices have varying degrees of authority, may allow new potentially discriminatory products to get to market without adequate oversight,” the letter said. “Adding to our alarm, under your leadership, the CFPB has shown little willingness to fulfill its statutory mandate to enforce fair lending laws.”

The lawmakers are requesting the bureau answer their questions by Dec. 9 on how it enforces the fair lending laws, whether bureau changes have affected that and whether the Apple Card went through the appropriate scrutiny.

Goldman has been criticized for allegations of gender discrimination in its Apple Card algorithms after several people complained that women were being given lower credit limits than men who had similar credit histories. 

The New York State Department of Financial Services announced earlier this month it would investigate Goldman and its new credit card launched this year. 

Warren has previously criticized Goldman for its response to the alleged discrimination, saying it should be the responsibility of the company to fix the potential discrimination and pull down the card if they cannot.

Goldman deferred to a previous statement when asked for comment, saying the company does not make decisions for “credit worthiness” based on gender, race, age, sexual orientation and other “legally prohibited factors.”

“For credit decisions we make, we can identify which factors from an individual’s credit bureau issued credit report or stated income contribute to the outcome. We welcome a discussion of this topic with policymakers and regulators,” the company statement from earlier this month said.