The Obama administration has been a great fan of the “disparate impact” approach to civil-rights enforcement. That means that the government challenges a practice — in employment, housing, voting, environmental law, you name it — simply because it has a disproportionate statistical effect on one racial (or gender, etc.) group or other; what’s more, the government does not have to prove or even allege that the practice is actually discriminatory by its terms, in its application, or in its intent. So, for example, if a bank required a down payment, or credit history, or home value, or whatever that the government didn’t like, it could sue — and it would be up to the bank to prove to the satisfaction of a judge or jury at a trial that there was some sort of “necessity” for that practice. Anyway, the banks have started to push back against this practice with the regulators, and they also may get a chance next term to persuade the Supreme Court that such lawsuits are not within the Fair Housing Act.
Here’s another suggestion for them: Draft some legislation. While it would pass only the House for now and would never be signed by this president — hey, the banks’ chances with current regulators aren’t so hot either — challenging the disparate-impact approach is a good issue, and it’s time to start getting some representatives and senators up to speed on it. The House has already passed a bill aimed at the Equal Employment Opportunity Commission’s use of the approach to challenge employers’ use of criminal background checks. And remember how outraged people were a few years ago when the city of New Haven defended (before the Supreme Court, after an assist from then–appellate judge Sonia Sotomayor) its decision to throw out the results of a firefighter exam because too many people of the “wrong” color passed it and too many people of the “right” color didn’t? This is an area where Congress needs to get involved.