Think about it this way - banks are prohibited from asking certain questions. However, if they have a strong correlation with another factor, then they can ask that and get the same result.

Banks are absolutely allowed to ask for your income and credit history. Why would phone model be a better signal than credit score, for loan defaults?

You can normalize data in order to isolate the effects of a given variable. Essentially, you just change the question from 'Are android users more likely to default on a loan?' to 'Given that all other factors are roughly equal, are android users significantly more likely to default on a loan' and then you do some complex math I don't understand to determine whether income disparities are actually a factor or if the model phone you own affects your likelihood of repaying a loan without regard to your income.