The House approved a measure Wednesday that would bar the Department of Justice from using federal funding to apply a controversial legal theory on price discrimination in litigation.
The provision, introduced by Rep. Scott Garrett, R-N.J., was included in a broader appropriations bill for several agencies, including the Justice Department, on Wednesday afternoon. Lawmakers approved the Garrett amendment by a vote of 232-196, largely down party lines. The measure would prohibit Justice Department officials from using disparate impact theory in lawsuits.
"While everyone agrees that discrimination has no place in the lending practices of any respectable institution, the application of disparate impact theory has had devastating impacts on law-abiding businesses who have diligently maintained fair and consistent lending standards," Garrett said in a press release. "The federal government should be encouraging sound business practices, not punishing those that utilize them."
Both the Justice Department and the Consumer Financial Protection Bureau have used disparate impact theory under fair lending laws to go after racial pricing disparities that supporters say stem from unintentional discrimination. But the legal argument has also attracted its share of critics, including conservative judges and lawmakers, who argue that disparities, highlighted using statistical analysis, do not necessarily equate to discrimination.
The broader spending bill is likely to come up for a House vote in coming days. White House officials have already threatened to veto the legislation over the inclusion of other, unrelated spending provisions.