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Disparate Impact: Liberals New Affirmative Action Program to Circumvent Sound Financial Principles and Promote Wealth Redistribution, Legalized Extortion

Words have meaning …

While words have meaning, President Obama and his fellow travelers are wont to use the old socialist trick of re-definition to support their toxic liberal agenda. George Orwell's novel 1984 proposed that people's thoughts could be constrained by the redefinition and reduction of their language.

"Orwellian" is an adjective describing the situation, idea, or societal condition that George Orwell identified as being destructive to the welfare of a free and open society. It connotes an attitude and a policy of control by propaganda, surveillance, misinformation, denial of truth, and manipulation of the past, including the "unperson" — a person whose past existence is expunged from the public record and memory, practiced by modern repressive governments.

The adjective Orwellian refers to these behaviours of The Party, especially when the Party is the State:

  • Invasion of personal privacy, either directly physically or indirectly by surveillance.
  • State control of its citizens' daily life, as in a "Big Brother" society.
  • Official encouragement of policies contributing to the socio-economic disintegration of the family.
  • The adoration of state leaders and their Party.
  • The encouragement of "doublethink", whereby the population must learn to embrace inconsistent concepts without dissent, e.g. giving up liberty for freedom. Similar terms used are "doublespeak", and "newspeak".
  • The revision of history in the favour of the State's interpretation of it.
  • A (generally) dystopian future.
  • The use of euphemism to describe an agency, program or other concept, especially when the name denotes the opposite of what is actually occurring. E.g. a department that wages war is called the "Ministry of Peace" or "Ministry of Defence".

<Source>

Disparate impact leads to unconstitutional affirmative action …

In United States employment law, the doctrine of disparate impact holds that employment practices may be considered discriminatory and illegal if they have a disproportionate "adverse impact" on members of a minority group. Under the doctrine, a violation of Title VII of the 1964 Civil Rights Act may be proven by showing that an employment practice or policy has a disproportionately adverse effect on members of the protected class as compared with non-members of the protected class.  <Source>

Why it is unconstitutional under the Fourteenth Amendment …

Amendment XIV - Section 1.

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Any action which promotes benefits for one person or class of persons over another person or class of persons is unconstitutional as it does not provide equal protection under the law for each party.

Government meddling in the housing markets was one of the proximate causes of today’s economic crisis …

Simply put, the government circumvented sound and prudent lending requirements that we designed to insure that a borrower could repay a lender based on his current financial condition and past history. By relaxing common-sense credit lending provisions, we saw the rise in so-called “liar loans” where the borrower did not have to declare their employment, income or assets. In addition, the hyper-politicized government regulatory agencies demanded that financial institutions make loans in disadvantaged areas and to ignore obvious risks when dealing with minority, women or poor borrowers. To this day, the government is propping up the housing market to avoid adverse impacts on financial institutions who hold reduced-worth mortgage-backed assets on their books. Possibly pushing some institutions into technical insolvency if financial institutions were forced to take significant write-downs. Ignoring the truth – if the housing market cannot find its natural bottom, assets can never be correctly valued and, thus, the balance sheets of financial systems are not true and correct.

And it is repeating …

You would think that the lessons of the past years would preclude inappropriate government meddling in the housing marketplace. But, we find the government allowing private parties or consumer-activist organizations to claim “disparate impacts” based on little more than an analysis of the gross statistics – when, in fact, each case involves an independent calculation of risk factors which result in the denial of loans or the interest rate offered.

This rule formally establishes the three-part burden-shifting test for determining when a practice with a discriminatory effect violates the Fair Housing Act.

Under this test, the charging party or plaintiff first bears the burden of proving its prima facie case that a practice results in, or would predictably result in, a discriminatory effect on the basis of a protected characteristic.

As in the past, the pointy-head academics and activists simply used public data contained in loan application registers to make a case of statistical abuse. That is, some zipcode did not appear to be receiving its theoretical allocation of loans – ignoring that much of the property was decaying or near worthless – or that some class of persons were charged higher fees and interest rates – ignoring than many of these people had poor credit histories or lacked the ability to replay loans at the “teaser rates” they were initially offered.

If the charging party or plaintiff proves a prima facie case, the burden of proof shifts to the respondent or defendant to prove that the challenged practice is necessary to achieve one or more of its substantial, legitimate, nondiscriminatory interests.

Again, having made a statistical case, it is not up to the charging party or plaintiff to actually prove their case, the burden of proof shifts to the respondent or defendant to prove their actions were not discriminatory. Since when did we flip the rule from “innocent until proven guilty” to presumptively guilty until proven innocent?

If the respondent or defendant satisfies this burden, then the charging party or plaintiff may still establish liability by proving that the substantial, legitimate, nondiscriminatory interest could be served by a practice that has a less discriminatory effect.

This is manifestly unfair and grossly unacceptable as it provides that any respondent or defendant having made an adequate legally acceptable defense of its practices is still wrong under the law if the charging party or plaintiff can show that there might be a better policy to avoid potential discrimination. Absolutely insane – except in a socialist world bent on destroying our capitalist system.

This rule also adds and revises illustrations of practices that violate the Act through intentional discrimination or through a discriminatory effect under the standards outlined in § 100.500.

Because the rule does not change decades-old substantive law articulated by HUD and the courts, but rather formalizes a clear, consistent, nationwide standard for litigating discriminatory effects cases under the Fair Housing Act,  it adds no additional costs to housing providers and others engaged in housing transactions. Rather,

This is pure bullpucky. The costs of investigation, defense and any settlements, justified or unjustified, are passed along to consumers in the form of higher rates or lower yields on their deposits and investments. Resulting in wealth transfer from depositors and investors to socialist community activists groups. Not to mention the practice of hiring these groups to teach “tolerance” or monitor compliance which exacerbates the costs and institutional damage.

Bottom line …

This rule legalizes extortion by consumer/community-activist groups who can lay a claim against a financial institution without fear of reprisal. Most financial institutions preferring to settle a potentially costly lawsuit before suffering “reputational damage.” 

This is the type of legislation that urges financial institutions to ignore credit histories, employment or other factors to avoid costly disparate impacts. Another blow to sound lending practice and another precursor to financial failure.

This can be summarized by BOHICA: Bend Over Here It Comes Again!

-- steve

Reference Links …

Federal Register: 24 CFR Part 100 -- Implementation of the Fair Housing Act’s Discriminatory Effects Standard; Final Rule


“Nullius in verba.”-- take nobody's word for it!

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“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

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“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS

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