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Taylor on Title VI disparate impact claims

Paul Taylor in the Harvard Journal on Legislation:

Congress may consider an amendment to Title VI of the Civil Rights Act of 1964, which would permit private disparate impact discrimination lawsuits to be filed against entities receiving federal financial assistance. However, unlike Title VII of the same Act, Title VI does not contain a national security exception. This article addresses the potential impact of the proposed amendment on national security programs administered by federally subsidized entities. Particular emphasis is given to the airports, airlines, and private screening companies that administer the nation's post-9/11 security measures. Finally, the Article discusses how the disparate impact claims authorized by the amendment may frustrate legislatively enacted policies such as welfare reform and English language programs.

With a Republican House, one would suspect that the idea is at least temporarily dead. But of interest on pp. 105-06 (footnotes omitted), given yesterday's post:

One recent example of another side-effect of previous legal campaigns based on disparate impact claims is the current financial crisis. While there were many pressures on mortgage lenders to relax the standards under which loans were extended in the 1990's, one factor was the Clinton Administration Justice Department's aggressive pursuit of disparate impact claims. The Clinton Administration pursued those claims in the mortgage lending field as well, making allegations that lenders' facially neutral credit criteria had a disparate adverse impact on the availability of mortgages to certain covered groups, including those in low-income communities. The threat of such lawsuits pressured lenders to extend more mortgages to low-income communities so disparate impact lawsuits could be avoided. Economists have suggested that these relaxed lending standards were a prime cause of the current financial crisis because many loans were extended to people who could not reasonably be expected to be able to pay them back. As the Washington Post editorialized, "the problem with the U.S. economy . . . has been government's failure to control systemic risks that government itself helped to create. We are not witnessing a crisis of the free market but a crisis of distorted markets. . . . [G]overnment helped make mortgages a purportedly sure thing in the first place."

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.