Removing Barriers Blog

H.R. 2577 and HUD’s rule titled “Implementation of the Fair Housing Act’s Discriminatory Effects Standard”
Posted June 04,2015 by CUNA Advocacy

CUNA joined a letter to all members of the House of Representatives supporting Representative Garrett’s (R-NJ) amendment to H.R.2577, the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act for Fiscal Year 2016. The amendment would prohibit the use of funds to implement, administer or enforce the “disparate impact” concepts contained in the rule titled “Implementation of the Fair Housing Act’s Discriminatory Effects Standard.”

The Department of Housing and Urban Development (HUD) issued a final rule titled, “Implementation of the Fair Housing Act’s Discriminatory Effects Standard.” The rule would create a liability for housing policies or practices that have “disparate impact” on protected classes, even when there was not an intention to discriminate. Credit unions and other financial institutions use a variety of neutral standards in mortgage underwriting, but under this rule, a lender could be challenged on these practices if they yield different results for a protected class, and the institution would face severe reputational harm. The amendment from Representative Garret would prevent this misinterpretation of the Fair Housing Act.