In Segregation in Texas, Professor Richard Epstein contends that the disparate effect standard can be an “intrusive and unworkable test that combines high administrative expense with threat of welcoming massive abuses by both the courts while the executive branch of government…” certainly, in the context of payday financing, the disparate effect test can be an unworkable test, however a great deal for the threat of welcoming massive abuses, but alternatively for the hefty burden the test places on claimants.
The Department of Housing and Urban Development’s formula of this disparate effect test is a three-part inquiry: at phase one the claimant must show that a certain training possesses “discriminatory impact.” At phase two, the financial institution may justify its techniques since they advance some “substantial, genuine, nondiscriminatory interest.” At phase three, the claimant may bypass that reason by showing the genuine ends of “the challenged practice could possibly be offered by another training which has a less discriminatory impact.”
Despite the fact that proof of discriminatory intent is certainly not necessary, claimants nevertheless bear a difficult burden at phase one out of showing with advanced analytical analysis demonstrable negative effects and recognition of this exact training causing these results. Such claims are especially hard to show in financing situations because loan providers may effortlessly conceal misuse of sex biases or stereotypes in determining prices, costs, and store places underneath the guise of “just doing company” or simple coincidence just because of customers’ buying choices. Continue reading “Payday Lending Regulations Neglect To Address Concerns of Discrimination”