Defending an Important Tool for Equal HousingOpportunity: The Debate Over Disparate Impsct
Disparate Impact TheoryMichael D. MitchellApril 19, 2012
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.
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
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
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
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!
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
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
Disparate Impact Theory Issues to Be Addressed • Credit scoring • Access to credit • Servicing issues • Foreclosure issues
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