WASHINGTON (6/5/15)--CUNA and a coalition of housing and financial services groups united Thursday in support of an appropriations amendment that would prohibit the use of funds to enforce the concept of “disparate impact.”
In a letter to lawmakers, the coalition emphasized their unflagging support for the Fair Housing Act and their commitment to providing housing services to families in full compliance with all fair lending and housing laws.
Since 1968, the Fair Housing Act has prohibited discrimination in the sale, rental or financing of dwellings and in other housing-related activities on the basis of a race, color, religion, sex, disability, familial status or national origin.
The disparate impact rule was added to the Fair Housing Act by the U.S. Department of Housing and Urban Development (HUD) in recent years, through a final rule that some note was not supported by the act’s text.
“Under this rule, even when a mortgage lender, apartment owner, apartment manager or housing cooperative takes every step to prevent discrimination and treats all consumers fairly and equally, a neutral policy can serve as a basis for very serious and harmful claims in the absence of intentional discrimination,” the letter reads.
The supported amendment, offered by Rep. Scott Garrett (R-N.J.), would prohibit HUD funding to implement, administer or enforce the disparate impact concepts contained in the final rule. The amendment to the Transportation, Housing and Urban Development and Related Agencies Appropriations Act for Fiscal Year 2016 (H.R. 2577) is expected to be voted on next week.
The rule would create liability for housing policies and practices that have a “disparate impact” on a protected class, even when there is no intent to discriminate.
“Our member companies use facially neutral standards, such as loan-to-value ratios and debt-to-income ratios in mortgage underwriting and for resident screening purposes because they are neutral and nondiscriminatory,” the group letter reads. “Under HUD’s rule, a lender, apartment owner, apartment manager or housing cooperative could be challenged if these practices yield different results for a protected class, and also face severe reputational harm and significant costs of defense.”
A U.S. District judge threw out the disparate impact regulation last November. The Supreme Court is expected to make a decision in late summer on a disparate impact case Texas Department of Housing vs. Inclusive Communities Project, according to a report from Housing Wire.