Trump's Bold Strike Against Disparate Impact: A Step Toward Real Equality – But Is It Enough?

I have written extensively about the madness of "disparate impact" on these pages before. Disparate-impact theory is a profound distortion of civil-rights law. It treats unequal outcomes as proof of wrongdoing even when neutral policies are applied without bias and disparities arise from ordinary economic and social differences—like education gaps, income differences, or credit history. Under this theory, no one needs to discriminate, or even know anyone’s race, for discrimination to be “found.” This horrible concept is a perversion of justice that ignores intentional discrimination and undermines colorblind equality, pushing entities toward race-conscious decisions.

I was therefore happy to read in the December 14 Wall Street Journal about the Trump administration's recent rollback of disparate-impact enforcement, which had grown far beyond anything Congress authorized. Trump’s April 23, 2025 Executive Order directed agencies to eliminate disparate-impact liability where possible, followed by the Department of Justice’s December 9, 2025 rescission of disparate-impact provisions in its Title VI regulations. Title VI bars purposeful discrimination in federally funded programs; it does not outlaw statistical differences in outcomes untethered from intent. This move restores civil-rights enforcement to its statutory core: intentional discrimination only.

An excellent example of the absurdity of disparate impact is the 2013 case of the CFPB and DOJ extracting a $98 million settlement from auto financier, Ally Financial, for alleged discrimination in auto lending—even though dealers had no information about borrowers’ race and set rates based on credit risk. Regulators retroactively assigned race using census-based proxies like surnames and ZIP codes, then punished the company because minority borrowers paid higher rates due to weaker credit profiles on average. Worse still, the theory pressures employers and governments to engage in race-conscious decision-making to avoid liability. In Ricci v. DeStefano (2009), New Haven discarded valid firefighter promotion exams solely because white candidates scored higher, fearing disparate-impact lawsuits. The Supreme Court correctly ruled that this race-based manipulation was intentional discrimination itself.

The Trump administration’s actions are an important corrective, but they are not permanent—a future administration could reverse them through new rules. Some statutes, most notably Title VII (codified in 1991), still permit disparate-impact claims. The lasting solution must come from Congress: a clear law stating that disparate impact alone can never establish discrimination. Civil-rights law should once again mean what it says—equal treatment under the law, judged by intent, not statistical outcomes. That would end this bureaucratic overreach for good and substitute genuine equal treatment for racial engineering.