Ethics · 18% of the SAFE exameasy
Correct answer: Disparate treatment requires INTENT to discriminate; disparate impact occurs when a neutral policy has a disproportionate adverse effect on a protected class — no intent required
TREATMENT = intent to discriminate (e.g., "we don't lend in that neighborhood because of its demographics"). IMPACT = a facially neutral policy that disproportionately harms a protected class, regardless of intent (e.g., a minimum loan amount that excludes areas with lower property values). Both are illegal under the Fair Housing Act and ECOA. The Supreme Court confirmed in Texas Dept. of Housing v. Inclusive Communities (2015) that disparate impact claims are valid under the FHA.
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