A mortgage lender reviews HMDA data and discovers that 85% of African American applicants were denied loans compared to 25% of white applicants with similar credit profiles. This pattern most likely indicates:
Correct Answer
B) Potential disparate impact discrimination requiring further investigation
Such a significant disparity in denial rates between racial groups with similar credit profiles suggests potential disparate impact discrimination. HMDA data is specifically collected to help identify these patterns that may indicate fair lending violations requiring further investigation and corrective action.
Why This Is the Correct Answer
Such a significant disparity in denial rates between racial groups with similar credit profiles suggests potential disparate impact discrimination. HMDA data is specifically collected to help identify these patterns that may indicate fair lending violations requiring further investigation and corrective action.
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