President Trump signed an executive order in April to eliminate disparate impact in federal enforcement. This term describes policies that appear neutral but unfairly affect protected groups. The CFPB updated its guidelines accordingly, opting to avoid racial classifications and redlining claims based solely on statistical analysis. The OCC announced it would stop pursuing issues of disparate impact risk while maintaining regular fair lending risk assessments by analyzing HMDA data to guard against intentional discrimination.
In April, President Donald Trump signed an executive order directing federal agencies to eliminate the use of disparate impact in enforcement or supervision. Disparate impact refers to policies or practices that appear neutral but disproportionately and unintentionally affect protected groups, even without discriminatory intent.
The Consumer Financial Protection Bureau (CFPB) revised its guidelines in April to reflect the executive order, stating it would not engage in unconstitutional racial classification or discrimination, including redlining or bias claims based solely on statistical analysis.
The OCC emphasized that it will continue conducting regular fair lending risk assessments by analyzing Home Mortgage Disclosure Act (HMDA) data for potential evidence of disparate treatment, despite no longer pursuing disparate impact risk.
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