Definition
Neutral policy having disproportionate negative impact on protected class, illegal under Fair Housing Act even without discriminatory intent.
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Disparate impact can occur with seemingly neutral policies. Lending standards, occupancy rules, and fees can have disparate impact. Proving disparate impact requires statistical analysis. Disparate impact claims are evolving legally. Understanding disparate impact is critical for compliance.
Pro Tip
Evaluate policies for disparate impact; seemingly neutral policies can discriminate.
Example
Policy requiring credit score of 700 that has disparate impact on minorities.