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Will HUD Propose a Revised Disparate Impact Rule by December 18?

In June 2018, HUD issued an advance notice of proposed rulemaking (ANPR) seeking comment on whether its 2013 Fair Housing Act disparate impact rule (Rule) should be revised in light of the U.S. Supreme Court’s 2015 Inclusive Communities decision.  Comments on the ANPR were due by August 20, 2018.  The Rule is the subject of a lawsuit originally filed in June 2013 by the American Insurance Association and National Association of Mutual Insurance Companies in the D.C. federal district court.  In April 2016, the trade groups amended their complaint to include a claim that the Rule is inconsistent with the limitations on disparate impact claims set forth in Inclusive Communities.  As described more fully below, the district court entered an order last week that contemplates HUD’s issuance of a proposal to revise the Rule by December 18, 2018.

Oral argument on the parties’ cross summary judgment motions was initially scheduled for February 13, 2017.  However, on February 8, 2017, the court granted in part a motion filed by HUD seeking a continuance of the oral argument to allow the Trump Administration to install new HUD and Department of Justice officials, and continued the argument until a date to be determined by the court.  In addition, on February 15, 2017, the court stayed the case pending further discussions between the parties.

On October 19, 2018, the parties filed a joint status report in which the trade groups urged the court to schedule oral argument on the cross summary judgment motions in light of uncertainty as to what HUD’s proposal might provide and its refusal to commit not to take enforcement action against the trade groups’ members under the Rule.

On October 26, upon consideration of the joint status report, the court entered a minute order continuing the stay until December 18, 2018 to allow HUD “to issue a Notice of Proposed Rulemaking in response to public comments.”  The parties were also ordered to file another joint status report by December 18 “updating the Court on the status of HUD’s issuance of the rule and proposing any next steps in this litigation.”

Disparate impact also appears to be on the CFPB’s rulemaking agenda.  On October 17, the CFPB released its Fall 2018 rulemaking agenda.  In its preamble to the agenda and a blog post about the agenda, the CFPB indicated that future rulemaking it is considering includes the requirements of the Equal Credit Opportunity Act (ECOA).  More specifically, the blog post referenced the Bureau’s May 2018 announcement that “it is reexamining the requirements of the [ECOA] concerning the disparate impact doctrine in light of recent Supreme Court case law and the Congressional disapproval of a prior Bureau bulletin concerning indirect auto lender compliance with ECOA and its implementing regulations.”

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About this Author

Barbara S. Mishkin, Ballard Spahr, Philadelphia, Deceptive Practices Lawyer, Fair Debt Collection Practices Act, Gramm Leach Bliley
Of Counsel

Barbara Mishkin focuses on consumer compliance and banking law. The federal laws with which Ms. Mishkin has dealt extensively include the Truth in Lending Act, Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, and Gramm-Leach-Bliley Act. She also has significant experience with state usury and lender licensing laws, as well as state laws prohibiting unfair and deceptive acts and practices.

American Bar Association, member, Consumer Financial Services Committee;...

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