Links in “Discriminatory Practices/Disparate Impact”

The Supreme Court will shortly be taking up a case that will test the legality of using statistical evidence of disparate impact to prove housing discrimination. The court will decide whether individuals have the right to sue based on evidence of disparate impact or whether they must demonstrate that there was an intent to discriminate. [1/12/15]

Disparate impact may finally have its day in court as the U.S. Supreme Court is scheduled to begin hearing arguments on Jan. 21. Previous cases involving the controversial concept, in which neutral practices that have a discriminatory effect are considered actionable, have settled before reaching the nation's top court. [1/6/15]

In addition to automakers' own lending arms, the probe for discriminatory practices in subprime auto lending has now grown to include Santander and TD Bank. [12/15/14]

The industry is picking up on a recent report that the CFPB's study used to make its claims of disparate impact on minority borrowers for auto loans was fatally flawed. The study found that the report overestimated African Americans by more than 40%. "If the agency doesn't know a borrower's race accurately, it casts doubt on whether it can detect racial bias." The CFPB counters that there are problems with the study. (Subscription required. To read an unlocked report of the underlying study, click here.) [12/8/14]

The Department of Justice and the CFPB may be going after Honda next for discriminatory pricing of loans made through auto dealerships. [12/4/14]

Cook County, which includes Chicago, has accused Wells Fargo of predatory lending, the practice of targeting minority borrowers for more costly home loans than their white counterparts. The county is seeking an amount that may exceed $300 million. [12/2/14]

A study finds that the CFPB's proxy methodology for measuring disparities in auto dealer reserve is flawed and subject to significant bias and estimation error. The report found that the reserve variations could largely be explained by objective factors other than race and ethnicity. [11/25/14]

After two prior cases were settled before it could weigh in on the matter, the Supreme Court has set what is considered to be an expeditious date to hear oral arguments in the third disparate impact case: Jan. 21, 2015. [11/25/14]

The CFPB ordered Franklin Loan Corporation (18 locations in Southern California and one in Chicago) to pay $730,000 for giving its employees illegal bonuses for steering consumers into loans with higher interest rates and is seeking injunctions to have the company end the practice and provide compensation to the potential 1,400 harmed consumers. [11/14/14]

The United States District Court for the District of Columbia removed support of HUD’s Disparate Impact Rule under the Fair Housing Act (FHA). Although the ruling does not affect ECOA (Regulation B), it potentially weakens the use of the rule which allowed liability under FHA based on a practice’s discriminatory effect even if the practice was not motivated by a discriminatory intent. The ruling emphasizes that FHA "unambiguously prohibits only intentional discrimination." [11/5/14]