New Jersey Attorney General Preserves Disparate Impact Theory of Lending Discrimination for Borrowers
Financial Services attorneys Bob Jaworski and Leonard Bernstein analyze in the April 2026 edition of The Banking Law Journal a recent final rule adopted by the New Jersey Department of Law and Public Safety's Division on Civil Rights clarifying that the New Jersey Law Against Discrimination prohibits "disparate impact" discrimination. The authors explain how New Jersey's approach diverges from recent federal policy changes and assess the practical implications for lenders and loan servicers operating in the state. They highlight key compliance risks, including shifting burdens of proof, evidentiary standards, reliance on third-party vendors and growing scrutiny of automated decision-making tools. Their article advises financial institutions to carefully evaluate their lending practices to mitigate potential liability given the split between state and federal expectations.
The authors also published a Holland & Knight alert on this topic.