The reasonable financing laws and regulations broadly prohibit two forms of discrimination: disparate treatment and disparate effect.

The reasonable financing laws and regulations broadly prohibit two forms of discrimination: disparate treatment and disparate effect.

Both theories may apply in some instances. Disparate therapy happens whenever a lender treats a customer differently due to a protected attribute. Disparate therapy ranges from overt discrimination to more subdued variations in therapy that will damage customers and will not have to be motivated by prejudice or perhaps an intent that is conscious discriminate. The Federal Reserve has made numerous recommendations into the U.S. Department of Justice (DOJ) involving disparate therapy in rates where bank employees charged greater fees or rates of interest on loans to minorities than to comparably qualified nonminority customers. These recommendations have actually resulted in several DOJ enforcement actions. These instances typically involve circumstances for which bank workers had broad discretion to create rates of interest and charges and might increase their compensation that is own by borrowers more. 4

Continue reading “The reasonable financing laws and regulations broadly prohibit two forms of discrimination: disparate treatment and disparate effect.”