Links in “Discriminatory Practices/Disparate Impact”

In a letter jointly signed by six industry trade associations, NAFCU and CUNA are urging Congress to limit the Justice Department’s ability to bring legal action solely on the basis of disparate impact. Disparate impact is defined as discrimination that results from an activity, despite any and all reasonable efforts to prevent the discrimination, that results in an adverse impact on a federally protected class. [5/30]

Several trade associations are lending their support to an amendment to the appropriations bill for fiscal year 2015 that would prohibit any funds made available by the Act from being used in "disparate impact" litigation. Under the disparate impact theory, even a lender who takes every step to prevent discrimination and treat all consumers fairly and equally could be the target of serious claims if it impacts a protected group adversely. For example, the DOJ and CFPB recently entered into a $98 million settlement with a bank for its indirect auto lending program. [5/30]

In a hearing on allegations of employee discrimination at the CFPB, the Chairman of House Financial Services Committee points out the irony that if the CFPB were a private company, the disparate impact related to its treatment of employees would be ample grounds for enhanced supervision and costly enforcement from the CFPB. [5/29]

In hearings in the House, union leader to testify that the CFPB was not responsive when unfair treatment to minority and older employees was first raised in September 2013. The disparities became public in March 2014, which seemed to make a notable difference in how the CFPB responded. [5/22]

Besides the hearing on alleged employee discrimination at the CFPB, there will be a second hearing this week on the need for greater transparency at the bureau. There are nearly a dozen bills and discussion drafts in varying stages that address CFPB's administrative practices. [5/21]

Ahead of this week's House hearing probing allegations of retaliation and discrimination among employees at the CFPB, the agency releases a report that finds its discrimination wasn't just based on race, but age, location, tenure, and union membership. At a cost of $5 million or more, the agency will pay agency employees as if they received the highest rating available at the time of their evaluation. [5/20]

Marketers can use big data to customize their offerings to consumers, but that also leaves room for subtle and not-so-subtle forms of discrimination in pricing, services and opportunities, the White House warns in a recent report. [5/7]

To the praise of CFPB's Cordray, BMO Harris Bank has introduced a new flat fee for dealerships of 3% of the amount financed, up to a maximum of $2,000. Cordray called it a "proactive step to protect consumers from discrimination." [5/1]

Hearing by the House Financial Services Committee seeks to shed light on disparate impact, Operation Chokepoint and other restrictions that are making it harder for consumers to access legitimate sources of credit. [4/21]

HUD alleged that Dubuque, Iowa's residency preference point system put African Americans at a disadvantage. Dubuque agrees to eliminate the preference system and submit any changes to its Housing Choice Voucher distribution program to HUD for review. [4/16]