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‘Disparate Impact’ Housing Amendment Passes House
Thursday, June 11, 2015 6:40 AM

Tuesday, the U.S. House of Representatives adopted a housing and transportation appropriations bill with a CUNA-backed amendment that would prohibit the use of funds to enforce the “disparate impact” concept in providing housing services.

The House voted 216-210 to adopt the Transportation, Housing, and Urban Development and Related Agencies Appropriations Act for Fiscal Year 2016 (H.R. 2577), which contains the amendment that prohibits Department of Housing and Urban Development (HUD) funding to implement, administer, or enforce the disparate impact concepts contained in the final rule. The House originally voted 231-195 to include the amendment, sponsored by Rep. Scott Garrett (R-NJ) in the bill.

The act has prohibited discrimination in the sale, rental, or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status or national origin since 1968. The disparate impact rule was added to the act by HUD several years ago and created liability for housing policies and practices that have a “disparate impact” on a protected class, even when there is no intent to discriminate.

CUNA and a coalition of housing and financial services groups sent a letter last week to lawmakers in support for the Fair Housing Act and the amendment, noting that coalition member companies and institutions use “facially neutral standards, such as loan-to-value ratios and debt-to-income ratios in mortgage underwriting and for resident screening purposes because they are neutral and nondiscriminatory.” Those practices could be challenged if they yielded different results for a protected class.