Fair Housing
A Montana lender who uses an automated underwriting system that has a disparate impact on minority applicants may be:
AFully protected since the system is objective and computer-generated
BSubject to fair lending liability if the system cannot be justified by business necessity and alternatives are available that have less discriminatory impact✓ Correct
COnly subject to state law, not federal fair housing law
DProtected as long as the system treats all races the same
Explanation
Even facially neutral, computer-generated underwriting systems can have disparate impact on protected classes. Under fair lending law, such systems must be justified by legitimate business necessity, and less discriminatory alternatives must be considered.
Related Montana Fair Housing Questions
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