FTC Abandons Disparate Impact and “Unfair Discrimination” Theories: A Major Shift in Federal Consumer-Protection Law

The Federal Trade Commission (FTC) has taken a major step toward dismantling two theories of discrimination. In a new Policy Statement Regarding Disparate-Impact Claims and “Unfair Discrimination” Claims, the FTC announces that it will no longer pursue disparate-impact claims under the FTC Act or the Equal Credit Opportunity Act (ECOA). Just as significantly, although less prominently emphasized in the Policy Statement, the FTC has now repudiated its position that the “unfairness” prong of Section 5 of the FTC Act independently authorizes the Commission to pursue discrimination claims….