HUD Seeks Comments on Potential Changes to its Final Rule on Fair Housing Act Disparate Impact Standard

On June 20, the Department of Housing and Urban Development (HUD) published an advanced notice of proposed rulemaking (proposed rule) inviting comments on HUD’s 2013 Implementation of the Fair Housing Act’s Discriminatory Effects Standard final rule (disparate impact rule) as it seeks to determine what changes to the rule, if any, may be needed to reflect the outcome of the 2015 Supreme Court decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. The proposed rule also is in response to the Department of Treasury’s October 2017 report recommending that HUD reconsider the disparate impact rule as it relates to the insurance industry.

The 2013 disparate impact rule codified HUD’s interpretation that the Fair Housing Act creates liability for practices with an unjustified discriminatory effect, even if those practices were not motivated by discriminatory intent, and establishes a burden-shifting framework for analyzing claims of disparate impact. The 2015 Supreme Court decision held that disparate impact claims are cognizable under the Fair Housing Act and clarified the standards for and constitutional limitations of disparate impact claims.

Please provide input to NCSHA’s Jennifer Schwartz by August 3 to inform our comments on the proposed rule. Comments are due to HUD by August 20.