Concern over the Justice Department’s ill treatment of banks is gaining visibility. We first blogged about the DoJ unfairly going after banks when Investors Business Daily wrote about the subject on July 11. Today’s Wall Street Journal includes this piece, in which essayist Mary Kissel essentially says DoJ has declared war on banks. Cam Fine of the Independent Community Bankers of America penned this August 29 letter to U.S. Attorney General Eric Holder expressing his concern about the Department’s tactics with respect to banks.
At the root of DoJ concern is the concept of “disparate impact.” This is the idea that even if someone has no intent to discriminate, and complies with every law and rule on the books, they can be guilty of illegal discrimination if the result of their lending decisions is that some racial groups get more loans than other racial groups. Disparate impact was all the talk in the early 1990s. The term lost its cachet during the Bush Administration, but now under President Obama, it is coming back.
I have always thought that if the government is going to prosecute based on disparate impact, it should go after its own school systems. In the Twin Cities, where I live, there is a significant “achievement gap” between Caucasian public high school students and African American public high school students, with much higher graduation rates among the Caucasians. Nobody is accusing the school system of racism, but if you applied the concept of disparate impact to education, you would have no choice but to charge school officials with violation of discrimination laws.