HUD issued the attached Federal Register notice to solicit public comments on amendments to the Fair Housing Disparate Impact Rule, issued in 2013. Please find the notice attached. The FR Notice’s summary and questions to the public are included below. NAHMA requests members review the notice and provide recommendations by July 31, 2018.
This advance notice of proposed rulemaking (ANPR) invites public comment on possible amendments to HUD’s 2013 final rule implementing the Fair Housing Act’s disparate impact standard, as well as the 2016 supplement to HUD’s responses to certain insurance industry comments made during the rulemaking. HUD is reviewing the final rule and supplement to determine what changes, if any, are appropriate following the Supreme Court’s 2015 ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., which held that disparate impact claims were cognizable under the Fair Housing Act and discussed standards for, and the constitutional limitations on, such claims. As HUD conducts its review, it is soliciting public comment on the disparate impact standard set forth in the final rule and supplement, the burden-shifting approach, the relevant definitions, the causation standard, and whether changes to these or other provisions of the rule would be appropriate. HUD is also issuing this ANPR in response to public comments submitted on its May 15, 2017, Federal Register document seeking input on ineffective regulations and an October 26, 2017, recommendation from the Department of the Treasury.
HUD’s Targeted Questions
HUD seeks public comment on appropriate changes, if any, to the Disparate Impact Rule. While the following list is not exhaustive, HUD is particularly interested in comments on the following questions:
- 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?
- 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?
- 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?
- Should the Disparate Impact Rule be amended to clarify the causality standard for stating a prima facie case under Inclusive Communitiesand other Supreme Court rulings?
- 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)?
- 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?