HUD Comments on Disparate Impact Due August 20, 2018

As compliance professionals, we have an opportunity to impact future rules and regulations by providing comments to proposed rulemakings.  This opportunity is actually built into the rulemaking process, and I can tell you from reading many final rules over the years that comments are at least considered and often addressed in final rules.  The truth is that comments can make a difference and, right now, we all have an opportunity to provide feedback (comment) regarding how disparate impact is evaluated under the Fair Housing Act.

On June 20, 2018, the Department of Housing and Urban Development (HUD) published a request for comments in the federal register regarding their 2013 final rule implementing the Fair Housing Act’s.  Among other things, this “reconsideration” is going to explore the “disparate impact” standard found in that rule as HUD is trying to determine what changes may need to occur to ensure the rule is appropriate in light of the Supreme Court’s 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc..  In this ruling, the Supreme Court “held that disparate impact claims were cognizable under the Fair Housing Act and discussed standards for, and the constitutional limitations on, such claims.”

Comments must be received by August 20, 2018.

Questions for Comment

In their request for comment, HUD is looking for feedback on six main questions as follows:

  1. Does the Disparate Impact Rule's burden of proof standard for each of the three steps of its burden-shifting framework clearly assign burdens of production and burdens of persuasion, and are such burdens appropriately assigned?

  2. Are the second and third steps of the Disparate Impact Rule's burden-shifting framework sufficient to ensure that only challenged practices that are artificial, arbitrary, and unnecessary barriers result in disparate impact liability?

  3. Does the Disparate Impacts Rule's definition of “discriminatory effect” in 24 CFR 100.500(a) in conjunction with the burden of proof for stating a prima facie case in 24 CFR 100.500(c) strike the proper balance in encouraging legal action for legitimate disparate impact cases while avoiding unmeritorious claims?

  4. Should the Disparate Impact Rule be amended to clarify the causality standard for stating a prima facie case under Inclusive Communities and other Supreme Court rulings?

  5. Should the Disparate Impact Rule provide defenses or safe harbors to claims of disparate impact liability (such as, for example, when another federal statute substantially limits a defendant's discretion or another federal statute requires adherence to state statutes)?

  6. Are there revisions to the Disparate Impact Rule that could add to the clarity, reduce uncertainty, decrease regulatory burden, or otherwise assist the regulated entities and other members of the public in determining what is lawful?

Submitting Comments

For those submitting comments, HUD has provided a few specific instructions as follows:

  1. Docket Number.  Comment letters should include the Docket Number “FR-6111-A-01”.

  2. Title.  Comment letters should reference the title of the HUD request: “Reconsideration of HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard”.

  3. Content.  Comment letters should address the six questions included in their request.

In addition to these content instructions, HUD has provided two methods for actually submitting public comments:

  1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500. Due to security measures at all federal agencies, however, submission of comments by mail often results in delayed delivery. To ensure timely receipt of comments, HUD recommends that comments submitted by mail be submitted at least two weeks in advance of the public comment deadline.

  2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make comments immediately available to the public. Comments submitted electronically through the website can be viewed by other commenters and interested members of the public. Commenters should follow instructions provided on that site to submit comments electronically.

Again, comments are due by August 20, 2018.

Links for Commenting

The entire request for comments can be found here.  

A public listing of comments already received can be found here.

The HUD 2013 final rule on the “Implementation of the Fair Housing Act’s Discriminatory Effects Standard” can be found here.  

The 2016 supplement to the 2013 final rule can be found here.

New SAR Form 2018

Revised Loan Estimate Expiration Date

Revised Loan Estimate Expiration Date