CUNA applauds HUD’s efforts to improve disparate impact rule

October 21, 2019

CUNA supports the Department of Housing and Urban Development’s (HUD) proposed revisions to existing disparate impact rule. CUNA submitted a comment letter to HUD on its proposal Friday, a proposal that would put a revised burden-shifting framework in place. 

HUD issued the proposal to conform its rule to a 2015 U.S. Supreme Court ruling. CUNA called on HUD in 2018 to make the necessary changes to conform to the ruling.

“Credit unions firmly believe that illegal discrimination should have no place in the financial services market. Individuals and institutions engaging in discriminatory behavior should and must be penalized. Accordingly, credit unions have long supported the Fair Housing Act and its use as a tool to help eradicate illegal discrimination from this nation’s housing markets,” the letter reads. “As part of those efforts, however, it is essential that both financial institutions and consumers have a clear understanding of the standards imposed by the law and the requirements for demonstrating compliance with its mandates.”

Specifically, HUD’s proposal would replace the 2013 Rule’s disparate impact analytical structure with a revised burden-shifting framework where a plaintiff raising a disparate impact claim would, initially, be required to plead that the policy or practice in question was “arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective.”

The proposal requires a plaintiff to show that a specific, identifiable policy or practice caused the discriminatory effect and to allege five elements set forth in the Proposed Rule with respect to the specific policy or practice. If the plaintiff makes this prima facie case, the burden would then shift to the defendant to rebut the disparate impact claim.

“Credit unions support the FHA and its objective of achieving more equitable and integrated communities, and they acknowledge a personal responsibility to act as leaders in the effort to make this objective a reality for both credit union members and the communities that credit unions serve,” the letter reads.

Questions about the HUD proposal or the disparate rule can be directed to CUNA Senior Director of Advocacy and Counsel Mitria Wilson at