Disparate impact and risky federal lending requirements
As we wrote in this blog post, PLF recently filed a brief in the Supreme Court case, Mount Holly v. Mount Holly Gardens Citizens in Action. The only issue in the case is whether the federal Fair Housing Act encompasses discrimination claims based on disparate impact. The Center for Equal Opportunity, Competitive Enterprise Institute, Cato Institute, Individual Rights Foundation, and Reason Foundation joined PLF in its brief.
When the government can be held liable for discrimination claims based merely on a disparate impact theory, the government is pressured into unconstitutional race-conscious decision making to avoid such claims. In this excellent article, Hans Bader of CEI discusses how the government uses disparate impact theory to pressure banks and mortgage companies to engage in risky, race-conscious lending.
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