NYDFS Says Disparate Impact Remains In Effect

Countering an Executive Order issued by President Trump and the adoption by the CFPB of its final rule revising Regulation B, the New York Department of Financial Services recently issued an Industry Letter warning the financial institutions that it regulates that they must consider disparate impact when lending.

“Regulated Entities are reminded that under Section 296-a, covered credit decisions that result in a disparate impact may constitute an unlawful discriminatory practice,” the agency wrote in a letter to financial institutions.

The department said that section “prohibits discrimination in, among other things, the granting, withholding, extending, or renewing, or in the fixing of the rates, terms, or conditions of any form of credit on the basis of statutorily established characteristics. N.Y. Exec. L. § 296-a(1)(b). Discrimination is prohibited on the basis of race, creed, color, national origin, citizenship or immigration status, sexual orientation, gender identity or