A lender refuses to make loans on properties in a specific census tract, claiming that property values there are 'too volatile for our portfolio.' Investigation reveals this tract is 85% Hispanic. The lender's defense that the decision was based on property values rather than race:
Correct Answer
B) Is irrelevant if the practice has discriminatory effect
Under the Fair Housing Act, discriminatory effect (disparate impact) can establish a violation regardless of intent. Even if the lender claims the decision was based on property values, if the practice disproportionately affects a protected class and lacks sufficient business justification, it constitutes prohibited redlining.
Why This Is the Correct Answer
Under the Fair Housing Act, discriminatory effect (disparate impact) can establish a violation regardless of intent. Even if the lender claims the decision was based on property values, if the practice disproportionately affects a protected class and lacks sufficient business justification, it constitutes prohibited redlining.
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