WASHINGTON (6/11/15)--A housing and transportation appropriations bill with a CUNA-backed amendment that would prohibit the use of funds to enforce the “disparate impact” concept in providing housing services was adopted late Tuesday night by the U.S. House of Representatives.
The House voted 216-210 to adopt the Transportation, Housing and Urban Development and Related Agencies Appropriations Act for Fiscal Year 2016 (H.R. 2577), which contains the amendment.
The amendment would prohibit Department of Housing and Urban Development (HUD) funding to implement, administer or enforce the disparate impact concepts contained in the final rule. The House originally voted 231-195 to include the amendment, sponsored by Rep. Scott Garrett (R-N.J.) in the bill.
CUNA and a coalition of housing and financial services groups sent a letter last week to lawmakers citing their unflagging support for the Fair Housing Act and the amendment (News Now June 5).
The act has prohibited discrimination in the sale, rental or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status or national origin since 1968.
The disparate impact rule was added to the act by HUD several years ago through a final rule that some say was not supported in the act’s text. The rule created liability for housing policies and practices that have a “disparate impact” on a protected class, even when there is no intent to discriminate.
Under that rule, even when a mortgage lender, apartment owner or manager, or housing cooperative takes every step to prevent discrimination and treat consumers equally and fairly, a neutral policy can serve as a basis for serious, harmful claims in the absence of intentional discrimination, said the letter from CUNA and the coalition.
The letter noted that coalition member companies and institutions 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,” but those practices could be challenged if they yielded different results for a protected class.
Last November, a U.S. District Court judge threw out a disparate impact regulation. The Supreme Court is expected to render a decision on a disparate impact case from Texas.