High court could decide 'disparate impact' case in June

June 24, 2015

WASHINGTON (6/24/15)--It is expected that the U.S. Supreme Court may issue a decision on Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. by June 29. That's the case that presents a new challenge to a legal theory--known as disparate impact--that allows statistics to be used to establish claims of discrimination without proving discriminatory intent.

The high court agreed in October 2014 to decide the case. Arguments were presented in January of this year.

The case arises from the alleged funneling of affordable housing tax credits predominantly to a minority area, thereby preventing low-income renters from moving out of poor neighborhoods and into affordable housing in a more economically diverse neighborhood (News Now Oct. 3, 2014).

The court's decision could have ramifications for a wide range of industries, including many financial institutions, and could raise the bar for proving discrimination in cases where there was not a clear intent for unequal treatment.

Also addressing disparate impact, earlier this month, the U.S. House adopted a housing and transportation appropriations bill with a CUNA-backed amendment prohibiting the use of federal funds to enforce the “disparate impact” concept in providing housing services. And in November 2014, U.S. District Judge Richard Leon threw out a housing regulation issued by the Obama administration. Leon said the Fair Housing Act allows for only direct discrimination claims and not those based on "disparate impact."