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Coalition of state attorneys general issues guidance on disparate impact and algorithmic bias in lending

September 25, 2026

On September 17, a coalition of 14 state attorneys general issued joint guidance purporting to reaffirm that state and federal civil rights laws prohibit both intentional discrimination and practices that have an unjustified disparate impact, and that these protections remain enforceable despite recent federal executive actions the attorneys general characterized as seeking to narrow or eliminate such protections. The guidance, joined by the attorneys general of Massachusetts, Maryland, New York, California, Delaware, Hawaiʻi, Illinois, Michigan, Minnesota, Nevada, New Mexico, Oregon, Vermont, and Washington, states that disparate impact liability is a longstanding constitutional tool. The guidance further underscores that neither the president nor federal agencies can use executive orders, agency rules, or memoranda to change protections provided under the Constitution or federal or state laws.

The attorneys general noted that enforcement actions by state agencies and private litigants have historically deterred and rectified violations of anti-discrimination laws. These actions, according to the attorneys general, have also highlighted embedded biases in AI and algorithmic decision-making systems used by lenders, landlords, and employers “that can cause discriminatory effects based on race, sex, or age.” In a section on taking proactive measures to eliminate discrimination in its various forms, the guidance recommended that businesses and institutions conducting lending and tenant screening analyze machine learning and algorithm-based tools throughout their lifecycle to identify discriminatory outcomes and refine algorithms to include more relevant factors in evaluating creditworthiness. The guidance also addressed suggested practices and policies for furthering civil rights in language access, disaster and emergency preparedness, siting and permitting, employment, and education, and stated that proactive measures to remove unjustified barriers and ensure more equitable opportunities are legal, cost-effective, and benefit everyone.