CUNA to HUD: Conform disparate impact rule to S.C. decision

August 17, 2018

The Department of Housing and Urban Development (HUD) should issue a proposed rule to make necessary changes to its 2013 disparate impact rule to confirm to a 2015 U.S. Supreme Court ruling, CUNA wrote to HUD Friday.

HUD’s 2013 disparate impact rule codified HUD’s interpretation that the Fair Housing Act (FHA) creates liability for practices with an unjustified discriminatory effect, even if those practices were not motivated by discriminatory intent. The Supreme Court’s 2015 Inclusive Communities decision held that disparate impact claims are identifiable under the FHA.

“In light of Inclusive Communities, we believe it is necessary for HUD to revisit the 2013 Disparate Impact Rule. It is critical that the requirements of HUD’s rule conform to the findings of the Court in Inclusive Communities,” CUNA’s letter reads, noting that the Supreme Court’s characterization of some of the aspects of a disparate impact analysis differ from those of HUD.

“We urge HUD to thoroughly scrutinize the specific requirements of the 2013 Disparate Impact Rule against the expansive language in Inclusive Communities to determine all changes necessary to bring parity between the rule and the ruling,” CUNA’s letter reads. “Following that review, it is critical that HUD work with credit unions and other interested stakeholders through both the formal NPRM process and direct outreach to the financial services community.”

CUNA also thanked HUD for its decision to seek input on changes to the rule via an advance notice of proposed rulemaking (ANPR), and encouraged HUD and fellow federal regulatory agencies to utilize ANPRs where appropriate.