September 23, 2019

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HUD Publishes Proposed Revisions To Disparate Impact Rule

HUD’s proposed revisions to its disparate impact rule were published in today’s Federal Register.  Comments on the proposal are due on or before October 18, 2019.

Originally adopted in 2013, the rule sets forth the requirements for HUD or a private plaintiff to establish liability under the Fair Housing Act for discriminatory practices based on disparate impact even if there is no discriminatory intent.  The proposed revisions include a new burden-shifting framework and other changes to reflect the 2015 U.S. Supreme Court ruling in Texas Department of Housing and Community Affairs v Inclusive Communities Project, Inc.

Under the proposal, a plaintiff would need to allege five elements to establish a prima facie case based on a claim that a policy or practice has a discriminatory effect, including that the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective and that there is a robust causal link between the challenged policy or practice and a disparate impact on members of a protected class which shows the specific policy or practice is the direct cause of the discriminatory effect.  As might be expected, HUD’s announcement this past Friday that it was releasing the proposal was quickly followed by criticism of the proposal from consumer groups.

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Richard J. Andreano, Jr. , Ballard Spahr Law Frim, Washington DC,  Business and Finance attorney, Mortgage Banking, Consumer Financial Services, Fair Lending

Richard J. Andreano, Jr., is the Practice Leader of Ballard Spahr's Mortgage Banking Group. He has devoted 30 years of practice to financial services, mortgage banking, and consumer finance law.

Mr. Andreano advises banks, lenders, brokers, home builders, title companies, real estate professionals, and other settlement providers on regulatory compliance and transactional matters, Federal Housing Administration (FHA) issues, and administrative examinations, enforcement actions and investigations. He also works with litigation counsel on devising strategies for defense of class action...

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Culhane, Ballard, Partner
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John L. Culhane, Jr., is known for his work advising on interstate direct and indirect consumer and residential mortgage loan and leasing programs, through both traditional brick-and-mortar facilities and e-commerce. Before joining Ballard Spahr, Mr. Culhane was associate counsel with Mellon Bank, N.A.; associate counsel with Bank of America NT&SA; and senior attorney (section chief) with the National Credit Union Administration, the federal agency regulating federal credit unions.

Mr. Culhane addresses issues involving licensing, advertising and marketing, application processing, privacy, disclosure, pricing, substantive terms, servicing, collection, portfolio sales, and securitization. His regulatory practice includes preparing clients for banking agency and CFPB compliance examinations and assisting in the defense of attorney general investigations and banking agency and CFPB enforcement actions. His clients have ranged from a multibillion-dollar bank holding company, to one of the nation's largest residential mortgage lenders, to a leading provider of financial institution forms and documentation. Mr. Culhane is a member of the firm's Fair Lending Task Force.

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