NCRC Condemns HUD’s Disparate Impact Rule

The Department of Housing and Urban Development (HUD) announced a final rule today, which places limitations on the use of the disparate impact standard in Fair Housing Act (FHA) complaints and imposes pleading and burden of proof requirements for plaintiffs that will make it very difficult, if not impossible, to challenge discriminatory policies and practices.

Jesse Van Tol, the CEO of the National Community Reinvestment Coalition (NCRC), made the following statement:

“The Trump Administration has attacked one of the most vital pieces of civil rights legislation, the Fair Housing Act, on multiple fronts in the last several weeks. They gutted the Affirmatively Furthering Fair Housing rule that enforces fairness in housing. Now, they are effectively eliminating the disparate impact standard in fair housing cases.

“This is a free pass to business policies that have discriminatory effects. The new rule puts an impossible burden on plaintiffs in disparate impact cases before the discovery process has even begun. If the rule was written honestly, it would simply state that HUD is no longer recognizing disparate impact at all.

“This change is shameful on its face, another blatant move to tear down decades of desegregation and anti-discrimination efforts upheld by federal courts. Even leading banking and real estate industry players told the government they opposed this move. But this administration seems to want to turn back the clock and make America a place where discrimination is both tolerated and encouraged. 

“High profile banking institutions, such as Bank of America, Wells Fargo, Citi, Chase and Quicken Loans, have come out against this unnecessary swipe at the disparate impact standard. The National Association of Realtors has asked HUD not to proceed with this rule. It seems that the real estate and banking industries have realized that in the midst of massive protests against racism and inequality, it’s a wildly inappropriate time to make it easier for businesses to discriminate with no consequences. It’s a shame that HUD has yet to figure that out.  HUD should be encouraging businesses to take more accountability for discriminatory practices, not less accountability.

“The Inclusive Communities case was an important victory that held the state of Texas accountable for placing its affordable housing disproportionately in inner-city Black neighborhoods. The Supreme Court recognized in 2015 that disparate impact theory was used properly in this case. But under HUD’s new disparate impact standard, plaintiffs, who have a legitimate claim of discrimination,  will have little chance of even getting a full hearing.

“The attacks on the Fair Housing Act are not the administration’s only efforts to destroy fair housing programs. In July, it also proposed a rule that would allow federally funded shelters to discriminate on the basis of gender identity. If the Trump Administration thinks that we won’t be able to fight these measures properly if they’re all released at once, they are wrong. We will oppose all of these decisions with full force.”

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