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The fair financing laws and regulations broadly prohibit two forms of discrimination: disparate therapy and disparate effect.

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The fair financing laws and regulations broadly prohibit two forms of discrimination: disparate therapy and disparate effect.

In a few circumstances, both theories may apply. Disparate therapy happens whenever a lender treats a customer differently due to a characteristic that is protected. Disparate therapy ranges from overt discrimination to more subdued variations in therapy that will damage customers and will not should be inspired by prejudice or a conscious intent to discriminate. The Federal Reserve has made many referrals towards the U.S. Department of Justice (DOJ) involving disparate therapy in rates where bank employees charged greater fees or interest levels on loans to minorities than to comparably qualified nonminority customers. These referrals have actually resulted in many enforcement that is DOJ.Read More »The fair financing laws and regulations broadly prohibit two forms of discrimination: disparate therapy and disparate effect.