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Commerce, Justice, Science, and Related Agencies Appropriations Act, 2015

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. Chairman, I rise today to offer an amendment that stops the Justice Department from using one of the most dangerous and illogical legal theories of all times: the theory of disparate impact.

In short, disparate impact liability allows the government to allege discrimination on the basis of race or other factors based solely on the statistical analysis that finds disproportionate results among different groups of people.

In recent years, the Justice Department has increasingly used this dubious theory in lawsuits against mortgage lenders, insurers, and landlords, and forced these companies to pay multimillion dollar settlements.

What is wrong with this, one might ask? Well, under disparate impact, one could never intentionally discriminate in any way, and even then have strong antidiscriminatory policies in place, and still be found to have discriminated.

If, for example, a mortgage lender uses a completely objective standard to assess the credit risk, such as the debt-to-income ratio, they can still be found to have discriminated if the data show different loan approval rates for different groups of consumers.

Some of these statistical differences and outcomes may actually be due to discrimination, but others may not be. It is impossible to tell which is which from the statistics alone. Under disparate impact it doesn't matter though. All statistical differences are considered by themselves discrimination.

To be clear, none of us have a tolerance for intentional discrimination. If there is intentional discrimination, we must prosecute it to the fullest extent of the law. The Justice Department's use of disparate impact, however, tries to fight one injustice with another.

On a more practical level, disparate impact will make it difficult, if not impossible, for lenders to make rational economic decisions about risk. Lenders will feel the pressure to weaken their current standards to keep their lending statistics in line with whatever the Justice Department bureaucrats consider nondiscriminatory.

We have seen what this discriminatory and damaging risky lending can do to our economy. It is truly reckless for our government to be encouraging those dangerous and short-sighted practices to continue.

Ironically, disparate impact forces lenders, insurers, and landlords to constantly take race, ethnicity, gender, and other factors into account or risk running afoul of the Justice Department.

You and I both know, Mr. Chairman, that even an accusation of discrimination could have a devastating impact on a small business.

I quote Roger Clegg, who is the president and general counsel for the Center for Equal Opportunity. He said:

The disparate impact standard for antidiscrimination law pushes people to do one of two things: Get rid of legitimate selection criteria, or use a racial double standard to ensure that the numbers come out right.

On balance, Mr. Chairman, disparate impact will make it more difficult and expensive for families to buy a home, and will result in more discrimination not less.

For these reasons, both philosophical and practical, I ask my colleagues to reject this misguided theory by supporting my amendment.

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