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House Dems call on HUD to rescind changes to disparate impact standard

WASHINGTON — House Democrats are blasting a Department of Housing and Urban Development proposal to gut the disparate impact standard for discrimination under the Fair Housing Act.

In a scathing letter to HUD Secretary Ben Carson Friday, all of the Democrats on the House Financial Services Committee called on the department to rescind a proposal they say will make it more difficult for plaintiffs to allege discrimination.

“The disparate impact standard is the most important tool for enforcing the Fair Housing Act in today’s rapidly evolving housing market,” the House lawmakers, led by Chairwoman Maxine Waters, D-Calif., wrote. “The disparate impact standard holds actors accountable for the discriminatory impacts of their actions regardless of whether the discrimination was intentional. Without the disparate impact standard, a plaintiff would essentially have to prove malicious intent as plain as a ‘No Blacks Allowed’ sign in order to get relief.”

The lawmakers said that the proposal is a departure from a standard “expressly supported by HUD under every Democratic and Republican administration” until now. They say the HUD proposal will make it “easier for defendants to deflect allegations” of discrimination and disincentivize the collection of demographic data “that would otherwise help entities have proactive strategies around fair housing.”

The letter comes after an August plan by HUD that would require consumers to follow a five-step framework to demonstrate discrimination, and would have to show that a policy or practice is “arbitrary, artificial and unnecessary,” to move forward with a claim.

Banks have long criticized the “disparate impact” standard, which they say unfairly punishes lenders for discriminatory effects even if none were intended. The U.S. Supreme Court in 2015 ruled that such a standard does apply under the Fair Housing Act, but left it to HUD to determine if changes to its disparate impact rule were necessary.

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