07/10/2015

Perspective on Supreme Court’s Disparate-Impact Ruling

In an online column in ICBA Independent Banker® magazine, ICBA Vice President and Senior Regulatory Counsel Lilly Thomas explains the Supreme Court’s recent ruling upholding the disparate impact theory of anti-discrimination law. In a setback for the financial services industry, the high court ruled that lenders can be held liable for neutral practices that have a disparate impact on certain classes of borrowers, even when lenders have no intent to discriminate.

“While the high court upheld the disparate-impact theory of liability, it also limited how the theory can be applied in court so companies can make the practical and profit-motivated business choices that sustain the free-enterprise system,” Thomas writes. “The majority opinion made clear that disparate-impact cases cannot rely on statistics alone and that the accuser must also cite the specific policy that causes the disparate result.”

Every month, the Washington Watch column covers legislation and regulatory issues that impact the nation’s community banks. Complimentary digital edition subscriptions to ICBA Independent Banker are available to any employee of an ICBA member bank. Subscribe Today.