Goldman Sachs, Bank of the Rich and Powerful, is Dipping Into Subprime Lending With Apple Card (cnbc.com) 105
Goldman Sachs is casting a wide net for customers of its new credit card with Apple, approving some subprime borrowers for the product. CNBC: The bank, which is in charge of deciding who gets the Apple Card, is accepting some applications from users with less-than-stellar credit scores, according to people with knowledge of the matter. Goldman began to make the card available to some Apple customers this week ahead of a broader rollout later this month. From the start, Apple wanted its bank partner to create a technology platform that would approve as many of its 100 million-plus U.S. iPhone users as possible, within the bounds of regulations and responsible lending, according to the people. That's in line with the tech giant's desire to provide a good user experience for its customers.
desire to provide a good user experience for its c (Score:1)
https://apple.slashdot.org/sto... [slashdot.org]
This is not good news (Score:5, Insightful)
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It also raises another question:
Are there really Apple customers with "less than stellar" credit scores?
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Are there really Apple customers with "less than stellar" credit scores?
Yes. A friend told me that he would have to buy a newer iPad if I ever got an iPad with better specs. He can barely afford the payments on his current iPad and iPhone.
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OK, I stand corrected.
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Sure there are. You can get a used iPhones pretty easily and get a prepaid SIM for them.
You probably want those people, too, as they are more likely to carry a balance on their Apple Card than someone with an 850 FICO score and an iPhone XS that they could afford to buy outright.
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Well sure. If you start buying every single Apple product out there as soon as it's released, you're probably going to be maxing out your credit cards and having difficulty making all the payments on time. Thus, a bad credit score.
This is a perennial American problem, where younger people just don't understand credit and treat it like it's free money. In the past though, getting a credit card used to be difficult because the banks were picky. Later on they realized that bad financial responsibility was g
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This is a perennial American problem, where younger people just don't understand credit and treat it like it's free money.
I seem to recall that the great depression was caused by speculators and adults buying on credit. Not young people with credit cards.
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In the past though, getting a credit card used to be difficult because the banks were picky.
Yes, but that isn't fair. It is racist, and discriminates against those with no jobs, shitty jobs, shitty judgement, shitty priorities, expensive tastes and an irresponsible attitude in general. It promotes "wealth inequity".
So, banks had to loosen standards, so that anyone can get a credit card, whether they're a good credit risk or not.
Hooray, for socialism!
Re: This is not good news (Score:2)
You seem to have missed the part where banks make more money off people with bad credit than from those with good credit.
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iPhones are the phones of choice of poor people. Abundantly available second hand, supported by Apple for years, cheap and reliably decent. Often they can be acquired for free as hand-me-downs.
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Are there really Apple customers with "less than stellar" credit scores?
These days the only people that don't have iphones are the people who don't want iphones. Kids flipping burgers at McDonald's have iphones.
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So when Goldman-Sachs gets into trouble after those sub-prime loans go bad, we need to let them die.
To quote OK Go, "needing is one thing, and getting's another". Goldman-Sachs probably has more control over our government (especially any sort of regulators) than any other corporation.
Let this be a lesson to any Washington politicians who still believe that Goldman-Sachs alumni represent the best pool from which you can choose financial advisors to the government.
They will never stop believing in the fat checks. All those zeroes. Clearly the best pool for financial anything!
Re:This is not good news (Score:4, Insightful)
Their managers are not going to be able to claim that they were unaware about what could happen when you lend money to people with bad credit.
Oh, give it a rest. Their managers always knew what would happen if you make bad loans. Everyone knows what happens if you make bad loans. Everyone except the federal regulators who jumped on banks who refused to make bad loans, because that was prima facie evidence of discrimination. The illegal kind of discrimination where you don't make loans to poor people because you know they won't be able to pay them back, but the great society wanted home ownership to be achievable by everyone.
It used to be called "redlining", and redlining bad. It's when you deny loans to people in a certain area at a higher rate than you deny them to other areas. You're discriminating, and that's bad. Except that there is a correlation, many times, between areas of a city and income levels.
Things like the CRA and federal enforcement pushed banks to make those loans anyway. Anyone with a brain knew that these bad loans would have to go somewhere, since a bank can only have so much in outstanding loans. Of course they aggregated them and sold them up the chain. Who couldn't predict that? And who couldn't predict what would happen when the people who took out these loans decided to default on them in record numbers? They were the victims, of course, so they felt justified in doing it.
Those who have no clue about economics were amazed and aghast at what happened. Those who have an anti-bank agenda won't let anyone forget, they just change the reasons to protect the guilty.
You don't have to make loans to poor people (Score:2)
Yes, Redlining isn't legal in most jurisdictions. That's because segregation and white flight left a lot of middle class families in poor, mostly bla
CRA (Score:2)
unless you want to.
Unless you want to stay in business. Unless you want to expand to cover an underserved part of the city you arlready serve. Unless you want to keep the federal regulators off your back for discriminating. Unless a lot of reasons that forced banks to make the loans. All of them coming from Dodd and Frank and CRA and ACORN and other community activist groups who spent their waking hours looking for examples of discrimination so they could extort the banks into giving them money.
You really ought to read "Arch
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Where the fuck do you people come from?
Married parents (of the opposite sex).
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Well, your version of history misses a few wrinkles.
In the 2008 subprime crisis, it wasn't regulators or political correctness that caused banks to take on so much subprime debt was a type of security called a "derivative". It was a kind of insurance policy for assets containing substantial subprime loans that allowed the holding institution to remove the risk involved from its books. But the risk didn't disappear, it got dispersed into the whole system. This trick was so popular it caused the entire s
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Well, your version of history misses a few wrinkles. In the 2008 subprime crisis, it wasn't regulators or political correctness that caused banks to take on so much subprime debt was a type of security called a "derivative".
Your version ignores the obvious cause and tried to pin it on an obvious side-effect. Yes, it was regulation that caused the crisis, since it was regulation that forced banks to make the loans that they knew were no good. If they wanted to expand a branch, they had to get regulatory approval. If they wanted to expand services, they needed regulatory approval. That approval carried a cost of "non-discrimination", and that meant that there was no primae facea evidence of any. If you had to get called on the c
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The foreclosure rates were highest in areas where they weren't applying discriminatory practices like redlining so the CRA had no impact: https://ritholtz.com/2009/01/u... [ritholtz.com]
None of the financial institutions that failed were banks that the CRA would have applied to: https://ml-implode.com/ [ml-implode.com]
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For a house yes, because the payments on interest are extremely high relative to the customer's salary. For a credit card the interest payments are relatively small and for some people with pad credit they're often paying more in interest than the cost of the original item.
Had a friend who was massively in debt because he couldn't stop buying stuff (including a house for a part time girlfiend). He was starting to get it into line by consolidating credit cards, closing out one mortgage, and cutting back on e
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For a house yes, because the payments on interest are extremely high relative to the customer's salary.
That's not how it is supposed to be. It's only that way if the borrower chooses to overborrow to buy more than they can afford. I'd say it is much more common for the credit card payments to be high relative to salary -- because they accumulate as people spend more than they make so they "have now" instead of save for later. A mortgage doesn't sneak up on you; increasing credit card bills often do. The bank tells you the payment schedule before you sign, interest and fees from paying the minimum (or less) o
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The banks were very much complicit here, you cannot excuse or forgive that behavior. The first time home buyers buying out of their league were not trying to game the system, they barely understood a fraction of the 2 foot stack of paper you get when you buy a home. They took advice from the real estate agents who were working with the banks, and the banks were willing to underwrite the loan while offering extremely low mortgage payments . You say the banks couldn't tell them they couldn't afford the loa
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The banks were very much complicit here,
The banks were doing what the banks were designed to do (make loans) and were required to do (make bad loans or get accused of discrimination by federal regulators.) That's their "complicity". They didn't force ANYONE to take out a bad loan. They didn't force anyone to take out any loans.
The first time home buyers buying out of their league were not trying to game the system,
Oh, please. When you're told that your requested loan is a much higher percentage of your income than it should be, you know you're asking for too much. But you want, so you ask. You're being told by the community activist
They're the ruling class (Score:2)
Also, they're holding the entire country hostage. The only way to get around that would be massive government action and at least 42% of the voting public will oppose that. So if we don't bail them out they'll drive us all over a cliff and that 42% will help push.
The only real answer is to not let them crash the economy in the first pla
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The entire banking sector is screwed up.
This is how banks are suppose to make money.
You store your money in the bank, the bank loans your money out to others at an interest rate higher then the rate you get for saving your money with them.
Loans are given out to people and organizations that are able to pay it back, or are using the money in an investment that has a good probability to succeed
For the poor and middle class, saving money in the bank should be a good investment into your future...
However banks
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For the poor and middle class, saving money in the bank should be a good investment into your future...
While better than not saving for your future, savings accounts have never kept up with inflation (and, during the 70s, paid as much as 10% less than inflation; brutal).
Learning how to invest safely is perhaps the most valuable life skill, yet we don't teach it.
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Now, even THEN, I didn't get any solid techniques for being successful at investing and certainly if my teacher had been good at it he wouldn't necessarily have been teaching either!
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That's actually pretty cool. It at least made to concepts seem familiar, rather than alien. And it's not like to need to learn much to understand the value of piling money into an index fund in your 401k.
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Loans are given out to people and organizations that are able to pay it back, or are using the money in an investment that has a good probability to succeed
Until the market is distorted by social engineering, where loans to people who cannot afford to pay for the home they feel they deserve become standard because denying such loans would be defacto discrimination and result in federal action against the bank.
However banks have gotten complex and difficult. If your balance is too low, then the bank charges you a fee,
Banks have not gotten complex or difficult. They have gotten COMMERCIAL. That is, they prefer to deal with companies instead of people. People are not their target audience any more.
Credit unions are the right answer. There are credit unions everywhere.
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The innovation trap. Innovation is expensive and has risks so without any compelling innovation ideas and a market they can no longer expand but which has a large number of locked in customers, Apple's fiduciary duty to shareholders leads them to merely hoard cash and park it in short-term securities.
Becoming a financial services entity is the next step, as it promises rates of return superior to short-term securities with less of the risk of actual product innovation.
IMHO, companies in this position ought
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But what worries me is that if they're delving into subprime loans it makes me think they're gearing up for more gambling + bail outs.
There used to be a game that primary school children played at birthday parties. It was called "Pin the Tail on the Donkey".
Now this game has been innovated into: "Pin the Bailout on the Taxpayers".
In other news... (Score:2)
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Why the surprise? Everything Apple does is a status symbol.
I own a Macbook, they're a joke. There's no way in hell they should be as popular as they appear to be.
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The user experience of costing too much, not offering enough ports, soldering in components so you can't upgrade, flaky bullshit keyboards that are "your fault", dying screens, overheating function bars, dying PMC's, and upgrade cutoffs?
Face it, not only are you lazy you're now making excuses for shortcomings.
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Problem is most alternatives just doesn't give the same user experience even if spec wise might be better and cheaper....
It's confirmed: I'm not "Artistic" enough to appreciate them. I just want to get some work done.
I want a proper DEL key and some ugly icons on the file manager that can delete files or even go up a level in the folder tree(!)
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I just bought an Acer Swift 1 for a friend who needed a lightweight little laptop. It looks and feels almost identical to my MacBook Air. Same size, same materials, except it has a really good 1080p screen (non-reflective!), the keyboard has real DEL and PgUp/PgDwn keys, it has SD card slot and real USB ports.
The only real weak point is 64Gb of storage but there's 43gB free and hey, you can whack in an SD card and that's fixed. For an on-the-go laptop, it's awesome. I'm thinking of getting one for myself.
Pr
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What can you do on a Mac that you can't do on Windows?
I get that you might want something Mac-only like GarageBand but that's not something Joe Sixpack does very often, if ever. It certainly doesn't explain all the MacBooks I see out there.
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Get an excellent UI with the power of Unix underneath.
There's a huge difference between being Unix, like macOS is, and slapping on a shitty "compatibility layer" like we've seen happen time after time on Windows.
Linux isn't an option because of systemd, and because its UI situation is awful.
If you really use MacBooks that way then you're the massive exception. You're not explaining why there's all those MacBooks out there when you can have identical look/feel windows hardware for a quarter of the price (and with better display, more USB ports, HDMI out, SD card, DEL key...etc).
OK, that Acer is a recent entry and MacBooks have been around for a while. Each generation of MacBook seems to fall farther behind the curve though.
Unless you understand the power of the Unix philosophy, which I don't think that you do, you will never truly comprehend why macOS is so widely loved.
I was brought up on Unix-like systems (actually PrimeOS [wikipedia.org]).
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Who is getting the Apple Card as a status symbol rather than a credit card?
Go onto the MacRumors forums sometime and you will quickly identify a number of individuals who fit your criterion. They’re the ones who take affront whenever anyone suggests that other credit cards have better perks than the Apple Card, or that an older iPhone serves its purpose just as well as a new one.
Apple Card is built to help those bad with credit (Score:4, Insightful)
I am cautiously OK with this, because lots of Apple Card features are built to help those who are bad with credit - making really clear when they need to pay, or enabling more frequent payment along with reminders.
I honestly think the Apple Card could help those who have slunk into being bad credit risks build habits that would lead them to becoming more responsible with credit... a worthy endeavor for a high profile company.
Lots of aspects about the Apple Card are more consumer friendly than pretty much any low end credit card so it will help avoid bad credit risks from being preyed on further.
I have seen this movie before (Score:3)
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Didn't Goldman Sachs starred in that 2009 movie where they got into subprime lending and crashed the economy? Is this a reboot of that?
Well, the electorate put an orange dummy in charge of the country and now they are filming a sequel.
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No, it isn't a reboot of that. CNBC is hoping that the term "subprime lending" showing up next to "Goldman Sachs" in their headline will function as clickbait. They were correct in this assumption.
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So according to you, probably a repubtard, lending to people who don't qualify isn't subprime?
According to me, a bleeding-heart libruuulllll, it can be subprime and still not be the same situation. Subprime credit cards aren't as big a problem as subprime mortgages. They're not exactly a good sign on any level, though; see the rest of this discussion for details.
This doesn't benefit Apple conumers (Score:1)
Straight away this card is another way for Apple to make money, I am sure they charge vendors a fee for Apple Pay and otherwise consumers get charged the typical high credit card interest. Nothing new in terms of this arrangement as many retail stores do deals for in house credit as well. Apple probably see's this as a way to offer a simply credit line to buy their expensive products. Goldman Sacks obviously thinks backing this will make them money as well. Hopefully with less defaults from card holders the
Partner was declined on this (Score:1)
Apple declined my partner for Apple Card (glad too cause I'm no fan of Apple).
Apple Pay will become Apple Card specific (Score:2)
If this thing gains any traction whatsoever, in a few years Apple Pay will require an Apple Card, allowing them to get you twice on the fees.
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There are plenty of no-fee cards. They will make money on people charging for expensive iCrap and not being able to pay it off.
Further proof (Score:2)
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The problem with using it for that stuff is that you either have an unsightly cable, or wed yourself to a form factor — or both. Apple won't accept either of those solutions. They're probably the only company that could really get people to buy a bunch of proprietary accessories, but they'd have to be excellent.
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Of course, for the card to be a status symbol, people should post pictures of their card to social media.
Better do both sides, just so people know how cool you are.
Dumb, just dumb (Score:2)
So what? It's aa CREDIT CARD. (Score:3)
It's a credit card people. Nothing more. Someone issuing a credit card to someone with bad credit or no credit happens all the time. In fact, it's one of the best ways to build up a credit history or to repair a bad one.
Now, if you have really bad credit, you may only be able to get a rather abusive credit card (I've seen them - I get generic junkmail credit card offers where they have an annual fee of $120+) with a pathetic credit limit ($500 or less). But they're fine if your credit history is so bad you can't get any other card and need to rebuild.
It's not like the Apple Card is a mortgage or something. It's just your run of the mill branded credit card in the end.
Credit cards fueling iGadgets (Score:2)
What (Score:1)
What could possibly go wrong?
And after it does, will the U.S. taxpayer pay the price?