Now, those same groups worry that the codification of the Fair Housing Act that they cheered in February 2013 is getting chipped away at, and possibly struck down entirely.
The “disparate impact” rule by the Department of Housing and Urban Development said a practice can have a discriminatory effect — even if one wasn’t intended — when “it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status or national origin.” Only under a “legally sufficient justification” could such a practice be determined to be legal.
Even before the rule was formally adopted, it served as the basis for large, separate settlements between the federal government and Wells Fargo and Bank of America that resolved discrimination claims involving African-American and Hispanic consumers.
It was expected to continue to be an important tool in fair housing’s arsenal. “We see less and less of the overt discrimination,” said Anne Houghtaling, executive director of HOPE Fair Housing Center. “It’s gone undercover and you need this tool. You can’t hide discrimination behind something that sounds good but doesn’t play out equally.”
In June 2013, two trade groups representing property and casualty insurance companies filed a federal lawsuit against HUD over the regulation, which for the first time specifically said that disparate impact rules covered the provision and pricing of homeowners insurance.