Alex Gano


In the aftermath of the Great Recession, the federal government began to enforce fair lending laws with a vigor previously unseen. To hold lenders accountable for the racially discriminatory effects of their mortgage lending practices, federal prosecutors and financial regulators applied the theory of disparate impact to fair lending laws for the first time.

Unclear, however, is what legal standards exist to evaluate allegations of discriminatory effects in this industry. No court has ever decided a fair lending case under a theory of disparate impact on its merits. That will likely change soon as major municipalities are pushing the boundaries of this theory to its outer limits. Last June, the U.S. Supreme Court granted certiorari in Bank of America v. City of Miami to address a pair of discrete issues in this area. This Comment attempts to answer some foundational questions about how the theory of disparate impact will be applied to mortgage lenders moving forward. It also makes a normative argument for judicial acceptance of this theory and continued governmental enforcement of fair lending laws.

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