Disparate Impact Defended
Financial Services Committee Ranking Member Maxine Waters (D-Calif.), the American Civil Liberties Union, the National Fair Housing Alliance and 23 former and current members of Congress have teamed up in support of disparate impact prior to a Supreme Court decision.
The Supreme Court is scheduled to begin hearing arguments on the latest disparate impact case to reach the nation's highest court. Similar cases were scheduled to be heard by the court in 2011 and 2013, but both were settled before opening arguments were heard.
Under the Fair Housing Act, regulators use disparate impact, which relies upon lending data, to determine if a policy or practice may have resulted in discrimination. Credit unions that produce outlier data are flagged by regulators as potential recipients of NCUA fair lending exams.
According to the National Fair Housing Alliance, federal appellate courts have “consistently ruled in favor of applying the disparate impact standard in housing discrimination cases, but despite this consensus, there are concerns that [Supreme Court of the United States] will strike down the standard.”
Meanwhile, Waters and others signed a congressional amicus brief for the Texas Department of Housing and Community Affairs, et al. v. Inclusive Communities Project Inc. case.
The case involves whether or not individuals have the right to sue based on disparate impact if they need to be held to a higher standard to prove discrimination.
“The disparate impact standard is absolutely essential to providing for fair housing throughout our nation. I sincerely hope that the Supreme Court will make the right decision in this case by affirming that the Fair Housing Act unequivocally prohibits actions that have the effect of disproportionately denying housing to marginalized communities,” Waters said Friday.
“Failure to do so would be contrary to congressional intent; it would overturn decades of major progress in fair housing; and would be particularly devastating for minority individuals and communities,” she added.
Waters said unchecked discriminatory housing practices, such as subprime lending to minority communities, in the time leading up to the mortgage crisis continue to prevent working class families from joining the middle class.
“The disparate impact standard under the Fair Housing Act has been effectively used for decades to weed out practices that create barriers to housing for people on the basis of factors like race, color, religion and gender,” she said.