Michael Mitchell | Disparate Impact Theory

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Michael Mitchell | Disparate Impact Theory

  1. 1. Defending an Important Tool for Equal HousingOpportunity: The Debate Over Disparate Impsct
  2. 2. Disparate Impact TheoryMichael D. MitchellApril 19, 2012
  3. 3. Disparate Impact Theory What is the Disparate Impact Theory? Prohibits policies, practices & procedures that have a disproportionate, adverse and disparate impact on people because of their membership in a protected class.
  4. 4. Disparate Impact Theory Why is Disparate Impact Theory Important?  Brings life to fair housing act  Addresses unintentional acts of discrimination  Way to address societal inequities  Way to address big issues  Way to combat systemic discrimination  Similar affect to class action cases
  5. 5. Disparate Impact Theory Acceptance of the Disparate Impact Theory  Upheld by courts  Enforced by HUD  Subject of new HUD proposed regulation  Utilized by Department of Justice
  6. 6. Disparate Impact Theory Areas in Which Disparate Impact Theory has Been Successfully Used  Combatting redlining  Combatting Reverse redlining  Combatting discrimination against African Americans, Latinos, people with disabilities  Insurance cases  Lending cases  Holding Wall Street accountable  Rating Agencies  Servicers
  7. 7. Disparate Impact Theory Issues • Restrictive minimum values • Restrictive loan amounts • Geographic restrictions • Property type restrictions • Credit overlays
  8. 8. Disparate Impact Theory Anatomy of a Case: • Identify policy with disparate impact • Build a case that is: • Sophisticated • Overwhelming • Solid • Case must be supported with Data Mapping makes it clear!
  9. 9. Disparate Impact Theory Anticipated Business Defenses • What are the business justifications for the policy? • Are they legitimate? • Are there better ways to achieve their legitimate business interest? • Identify less onerous alternatives • Identify the win-win
  10. 10. Disparate Impact Theory Limits on Disparate Impact • In America, most policies have a disparate impact • We must avoid making bad case law • Theory to be used judiciously • Not a time for recklessness • Cases brought must be Reasonable • Test your case on your colleagues before you file
  11. 11. Disparate Impact Theory Issues to Be Addressed • Credit scoring • Access to credit • Servicing issues • Foreclosure issues
  12. 12. Disparate Impact Theory Future of Disparate ImpactTheory under attack • Case law • Magner v. Gallagher  Disparate Impact Theory is here to stay!Theory being strengthened • New HUD regulation

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