What is disparate impact?
(Jeff Sorg, OnlineEd) – The Supreme Court’s recent decision on disparate impact basically means that even if the same policies are applied to all individuals as neutral and nondiscriminatory but are found to have the effect of discrimination then they are in violation of the Fair Housing Act. A neutral policy would be one that appears not to be discriminatory, but actually ends up being discriminatory in application or has the effect of discrimination against individuals protected under fair housing.
Disparate Impact is a legal doctrine under the Fair Housing Act which states that a policy may be considered discriminatory if it has a disproportionate “adverse impact” against any group based on race, national origin, color, religion, sex, familial status, or disability when there is no legitimate, non-discriminatory business need for the policy. In a disparate impact case, a person can challenge practices that have a “disproportionately adverse effect” on those protected by the Fair Housing Act and are “otherwise unjustified by a legitimate rationale.” (National Fair Housing Alliance)
Disparate impact lawsuits will usually rely on statistical analysis to show that a neutral policy has a disproportionate effect on a protected group. In other words, the practice is at fault based on its effects. An example would be a mortgage company that allows brokers and loan officers considerable leeway in determining a customer’s interest rate, thereby resulting in higher prices for Hispanics, whether or not this was the intended outcome of the practice.
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This article was published on June 30, 2015. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.
Jeff Sorg is a co-founder of OnlineEd®, an online real estate, mortgage broker, and vocational school founded in 1997, where he also serves as Chief Executive Officer, and School Director. Sorg holds vocational and post-secondary school instructor licenses in several states and has authored numerous real estate continuing education and pre-licensing courses and has been awarded the International Distance Education Certification Center’s CDEi Designation for distance education. Memberships include ARELLO (Association of Real Estate License Law Officials), the National Association of REALTORS®, Oregon Association of REALTORS®, and Portland Metro Association of REALTORS®. Awards and service include REALTOR® Emeritus in the National Association, Life Member award in Portland Metro Association and Chairperson of the Oregon Real Estate Forms Committee.
OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.