WBK Industry News - Federal Regulatory Developments

HUD Urged to Withhold Publication of its Disparate Impact Rule Under the Fair Housing Act

The Mortgage Bankers Association along with the National Association of Realtors and certain large mortgage lenders recently wrote to HUD urging it to refrain from publishing its final rule on disparate impact claims under the Fair Housing Act.

The MBA letter expressed appreciation that the HUD proposal was intended to align HUD’s rules with subsequent Supreme Court precedent, Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc.  Nevertheless, it also noted that “many expressed legitimate concerns about the rule eroding protections needed to combat housing discrimination and systemic inequality.”  In part, the letter said:  

At a time when we as a nation are having important and too-long-ignored conversations about racial inequality, we believe it is appropriate to withhold publication of the final disparate impact rule. . . .

Instead, we call on HUD to bring the housing, lending, and civil rights communities together for renewed discussions about how to address the stubbornly wide housing and wealth gaps faced by communities of color that still exist – and by some measures have grown worse – more than 50 years after the passage of the Fair Housing Act. Effective fair lending enforcement is an important piece of this discussion. However, history has also made clear that enforcement by itself is not enough to address the structural issues that have put homeownership and generational wealth-building beyond the reach of too many minority families and communities.

For more information on the disparate impact rule please see WBK’s prior coverage here.