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Financial Services Law Insights and Observations

NYDFS finds credit card underwriting showed no evidence of wrongdoing

State Issues NYDFS Credit Cards Discrimination Disparate Impact State Regulators

State Issues

In March, NYDFS released a report detailing the findings of an investigation into whether a global technology company and a New York state-chartered bank allegedly discriminated against women when making underwriting decisions for a co-branded credit card. According to the report, in 2019, allegations were made that the bank offered lower credit limits to women applicants and unfairly denied women accounts. NYDFS launched a fair lending investigation into the allegations and reviewed underwriting data for nearly 400,000 New Yorker residents, but ultimately found no evidence of unlawful disparate treatment or disparate impact. Among other things, the report noted that the bank “had a fair lending program in place for ensuring its lending policy—and underlying statistical model—did not consider prohibited characteristics of applicants and would not produce disparate impacts.” The bank also identified the factors it used when making the credit decisions, including credit scores, indebtedness, income, credit utilization, missed payments, and other credit history elements, all of which, NYDFS stated, appeared to be consistent with its credit policy.

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