On January 14, 2026, the HUD issued a proposed rule to remove its discriminatory effects regulations and leaving to courts questions related to interpretations of disparate impact liability under the Fair Housing Act. The proposal to remove disparate impact liability aligns with E.O. 14281issued in April 2025 titled “Restoring Equality of Opportunity and Meritocracy.”
The Fair Housing Act prohibits discrimination in housing-related activities based on protected characteristics, including race, sex, disability, and national origin. In 2013, HUD issued a rule formalizing that disparate impact liability is cognizable under the Act and established a burden-shifting framework for such claims. The Supreme Court affirmed the validity of disparate impact claims in 2015, prompting HUD to revise its regulations in a 2020 rule, which was later enjoined by a federal court before taking effect. Following a 2021 presidential memorandum, HUD ultimately reinstated the 2013 disparate impact standard through a final rule issued in 2023.
The proposal would remove regulatory language related to discriminatory effects under the Fair Housing Act. It would eliminate provisions stating that housing practices may be considered unlawful based on their discriminatory effects, even without discriminatory intent. It would also remove language explaining when such practices could be justified and how liability is evaluated.
Comments on the proposed rule will be accepted until February 13, 2026.