Sat.Jul 30, 2022

Unfairness and Disparate Effects

Public Citizen

by Jeff Sovern. As we wrote about in May , the CFPB takes the position that it can use its unfairness power when consumer financial service companies discriminate. One issue that has arisen is whether when it does so, the Bureau will use the disparate effects test, sometimes called the disparate impact test, to determine if discrimination has occurred. I think the Bureau has answered that question in the negative, though I'm not sure how often it will really matter.