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The FDIC announced late last month it had removed all references to disparate impact from its Consumer Compliance Examination Manual.
Instead, the agency said it will evaluate potential discrimination under the Equal Credit Opportunity Act and Fair Housing Act “only through evidence of disparate treatment.”
President Trump issued an executive order in April to eliminate enforcement of disparate-impact liability, which since the early 1970s has allowed courts to halt policies and practices that, while facially neutral, seem to exclude people based on characteristics such as race, gender and disability. The administration alleged that such liability “handcuffed” employers by requiring them to consider race and “racial balancing” to avoid legal liability.
The removal comes after the OCC did the same with its documentation in July.