The City of Miami is suing Bank of America and Wells Fargo for Fair Housing Act violations, with a Rube Goldberg-causation argument that goes like this:
See Bank of America v. Miami, by Ilya Shapiro, Trevor Burrus, and Sam Spiegelman, Cato Legal Briefs, December 20, 2019.
It's absurd on a few levels, but I never fail to be amused that when banks don't lend to minorities, it's "redlining"—and racist. When they do lend money, it's "predatory"—and racist.
Racist if you do, racist if you don't.
To get their win, Miami's lawyers are relying on "disparate impact” theory.
Under the theory, private business decisions or local government policies that aren’t motivated by race are tagged unlawful anyway because they have a statistically different impact on members of a given racial group.
In other words, if blacks simply have worse credit ratings, and as a result are charged higher mortgage rates, that’s “disparate impact.”
The theory assumes perfect racial equality and explains away any differences in result by race as racism.
Another piquant example is differential rates of school discipline on black and Hispanic students. Nobody bothers to ask whether black or Hispanic kids simply behave worse to begin with.
The folks at Cato are warning that if the 11th Circuit’s loosey-goosey causation formula is upheld by the Supreme Court, it could create a lot of chaos and unfairness.
