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The Trump Administration Guts Critical Anti-Discrimination Tool Used to Create Opportunity in Housing and Lending

Tuesday, September 8, 2020

The action leaves protected classes, including people of color, women, people of faith, people with disabilities, and families with children more vulnerable to housing discrimination

In issuing the final rule, the Administration even ignored the mortgage industry’s largest lenders and realtors, which opposed the action

Washington, D.C. – A primary legal tool used to identify and eliminate discrimination, known as the “disparate impact” standard, has been decimated by a new final rule issued late Friday by the U.S. Department of Housing and Urban Development (HUD). In addition to civil rights groups and elected officials, mortgage industry leaders – including Bank of America, JP Morgan Chase, Citigroup, Quicken Loans, and the National Association of Realtors – had urged HUD to not issue the final rule, citing concern it would facilitate housing discrimination and also calling for reexamination of the rule in light of the current national examination of structural racism.

Center for Responsible Lending Executive Vice President Nikitra Bailey issued the following statement:

“All Americans deserve a chance at the American Dream. Instead, the Trump Administration is denying opportunity at a time when millions have fallen ill with COVID-19 and hundreds of thousands have died. For far too many of these families, residential segregation made them more susceptible to this devastating disease and to mistreatment from the criminal justice system.

“Instead of being a uniter and attempting to heal, HUD has severely weakened a critical legal tool that creates equity of opportunity. For over 45 years, disparate impact gave Blacks, Latinos, Asian Americans and Pacific Islanders, people with disabilities, and women, including domestic violence survivors, a fair shot.

“It is unfathomable that HUD would gut one of the primary anti-discrimination instruments as the nation reckons with systemic racism. This action ignores the calls from a broad and diverse coalition of civil rights organizations, elected officials, and mortgage industry leaders who opposed the rule as wrong. With this announcement, HUD is continuing to block major advancements in reducing inequity just as it gutted the 2015 Affirmatively Furthering Fair Housing rule.

“We cannot let this action dim our hope. Americans of every stripe are still marching for justice, demonstrating a willingness to get in good trouble to redeem the soul of the nation. HUD must listen and reverse course.”

Additional Background

Discrimination in housing remains a huge problem. For instance, independent reporting on Home Mortgage Disclosure Act data show communities of color are “routinely denied conventional mortgage loans at rates far higher than their white counterparts.”

The Fair Housing Act of 1968 prohibits the use of policies that seem neutral on their face but have an unjustified discriminatory effect. This stems from a recognition that this discrimination may not be as obvious as overt discrimination but is no less invidious. Courts have permitted disparate impact claims for over 45 years. In 2015, the U.S. Supreme Court affirmed the use of disparate impact theory under the Fair Housing Act in its ruling in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc. The Court made clear that disparate impact theory is necessary to fulfill “the Fair Housing Act’s continuing role in moving the nation toward a more integrated society.”


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