Disparate impact rollback proposal will enable discrimination

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Administration is giving a green light to discrimination in housing and lending

Washington, DC – Today, Americans for Financial Reform Education Fund submitted a comment to the Department of Housing and Urban Development (HUD) in opposition to its proposed rule on disparate impact.


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Disparate impact is a legal theory that allows people to challenge policies that have a discriminatory effect, without having to establish intent. It is a critical, longstanding tool in fighting discrimination and advancing equal access to housing. HUD’s proposal would drastically raise the threshold for victims to bring a disparate impact claim and create more loopholes for defendants to escape liability.

“By creating so many obstacles to challenge discriminatory practices, the Trump administration is effectively making it impossible to bring any disparate impact claim,” said Linda Jun, senior policy counsel for Americans for Financial Reform Education Fund. “Federal authorities should be smoothing the way for victims of discrimination to seek justice, rather than making it easier for lenders and landlords to evade liability. This rule gives the greenlight to discrimination in housing and lending across the country.”

The HUD’s proposal on disparate impact:

  • Places a drastically higher burden on victims of discrimination by creating multiple new hurdles to even begin a disparate impact case
  • Prioritizes profits above people by allowing defendants to easily defeat a case if it simply costs more to not discriminate
  • Protects discrimination-by-algorithm by carving out special defenses that allow defendants to evade responsibility for relying on algorithms

Earlier this week, Americans for Financial Reform and 26 other organizations also commented in opposition to the Consumer Financial Protection Bureau’s proposal to cut back on reporting requirements under the Home Mortgage Disclosure Act (HMDA). HMDA data provides a picture of mortgage lending that is critical to identifying and combatting discrimination in housing and lending. The CFPB’s proposal would significantly roll back HMDA data collection requirements and make it easier to hide discriminatory lending practices.

“Taken together, these efforts to make anti-discrimination lawsuits more difficult and curtail the data we get about mortgages will make life harder for communities of color,” Jun added. “Both agencies need to drop these plans.”

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