A type of discrimination that occurs when a policy, practice, or procedure that appears to be neutral on its face has a disproportionate negative impact on a particular group of people based on their protected characteristic, such as race, gender, or national origin.
For example, a policy that requires all job applicants to have a high school diploma may seem neutral on its face, but it could have a disparate impact on certain groups of people, such as those who were not able to complete high school due to economic or social barriers.
In the context of lending and credit, disparate impact could occur if a lender has a policy or practice that results in certain groups of people being disproportionately denied credit, charged higher interest rates, or given less favorable loan terms. Even if the lender did not intend to discriminate against these groups of people, the policy or practice could still be considered discriminatory if it has a disparate impact.