WASHINGTON—The Department of Housing and Urban Development (HUD) has published an advanced notice of proposed rulemaking to reconsider the implementation of the Fair Housing Act's (FHA) "disparate impact" standard.
HUD's reconsideration of the disparate impact standard is a result of the Supreme Court's 2015 decision that upheld that lenders and governments can be guilty of racial bias in lending activity based on statistical patterns, even if racial intent is not proven, said NAFCU, which noted it supports the enforcement of fair lending laws and has raised concerns about disparate-impact claims.
The ANPR asks for public comment on the disparate impact standard's burden-shifting approach, relevant definitions, causation standard and whether changes to some of the rule's provisions would be appropriate.
HUD would also like feedback on possible defenses or safe harbors to claims of disparate impact liability, including when another federal statute substantially limits a defendant’s discretion or another federal statute requires adherence to state laws, noted NAFCU.