Disparate Impact Ruling
Blog posted On October 19, 2015
In June of this year, the Supreme Court passed a ruling allowing a legal doctrine of disparate impact to be recognizable under the Fair Housing Act. What does this mean?
A disparate impact is “an allegation that a law or practice has a discriminatory effect, even if it wasn’t based on a discriminatory purpose” (
HousingWire). While this might seem exceptionally broad, a court filing claiming a disparate impact must establish a clear causation and provide explicit evidence that a policy used by a lender actually caused the disparate impact. Other extensive limitations were placed on an accuser’s ability to bring disparate impact claims to court.
All of this stems from the pursuit of making housing affordable and consistent no matter race or other defining characteristic. This ruling has been seen as a major setback in the lending industry as it makes it harder to determine and define disparate impact and purposeful discriminatory lending. On the other hand, because the ruling comes with many stipulations that also protect lenders against such claims, it is likely this ruling will not have as great of an impact as originally thought.
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