Following up on a threat it made back in 2018, the New York State Department of Financial Services (DFS) announced on October 6, 2022 that it entered into a consent order with Rhinebeck Bank (“Rhinebeck”) to settle discrimination claims involving discretionary dealer markups on retail installment contracts with minority borrowers.  Under the settlement, Rhinebeck will pay a $950,000 civil money penalty, provide restitution to borrowers, and develop a compliance plan which includes updates to its auto policies to cap dealer markups on installment contracts purchased by the bank.… Continue Reading

In a memorandum issued on January 26, 2021, President Biden has ordered the Secretary of the U.S. Department of Housing and Urban Development (“HUD”) to “as soon as practicable, take all steps necessary to examine the effects of” the final rule issued by HUD in September 2020 (“2020 Rule”) revising its 2013 Fair Housing Act (“FHA”) disparate impact standards (“2013 Rule”).  … Continue Reading

On October 25, a Massachusetts federal district court entered a preliminary injunction staying and postponing the effective date of the final rule issued by HUD last month (“2020 Rule”) revising its 2013 Fair Housing Act disparate impact standards (“2013 Rule”).  The order also enjoins HUD from enforcing the 2020 Rule and keeps the 2013 Rule in place until further order of the court. … Continue Reading

On September 4, 2020, the Department of Housing and Urban Development (“HUD”) issued a final rule revising its 2013 Fair Housing Act (“FHA”) disparate impact standards (“2013 Rule”) to reflect the U.S. Supreme Court’s 2015 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., which held that disparate impact claims are cognizable under the FHA. … Continue Reading

The topics we discuss are: implications of the SCOTUS Seila Law decision on CFPB rules, past consent orders, ongoing enforcement, and the Texas lawsuit challenging the CFPB payday loan rule; DOJ/FTC auto dealer fair lending actions, status of disparate impact, and Google targeted advertising changes; the CFPB’s new advisory opinion program; timing of CFPB debt collection final rule; and OCC/FDIC final rules to undo Madden and plans to address “true lender.”… Continue Reading

Our podcast looks at the proposed changes to HUD’s rule for establishing liability under the FHA for discriminatory practices based on disparate impact even without discriminatory intent.  We discuss the proposal’s history, five-part burden-shifting framework, available defenses (looking closely at those for models used to assess credit risk), and HUD’s likely next steps.… Continue Reading

In its proposed disparate impact rule published in today’s Federal Register, HUD sets forth a framework for making (and defending against) claims of disparate impact under the Fair Housing Act.  In this blog post, we take a closer look at a new and unique aspect of the proposed rule: its treatment of mathematical models (like risk-scoring models used in the credit industry).… Continue Reading

HUD’s proposed revisions to its disparate impact rule were published in today’s Federal Register.  Comments on the proposal are due on or before October 18, 2019.

Originally adopted in 2013, the rule sets forth the requirements for HUD or a private plaintiff to establish liability under the Fair Housing Act for discriminatory practices based on disparate impact even if there is no discriminatory intent. … Continue Reading

The Department of Housing and Urban Development is expected to soon release proposed revisions to its 2013 rule under which HUD or a private plaintiff can establish liability under the Fair Housing Act (FHA) for discriminatory practices based on disparate impact even if there is no discriminatory intent (Rule).  The proposal has been submitted to Congress for review pursuant to the Congressional Review Act. … Continue Reading

In June 2018, HUD issued an advance notice of proposed rulemaking (ANPR) seeking comment on whether its 2013 Fair Housing Act disparate impact rule (Rule) should be revised in light of the U.S. Supreme Court’s 2015 Inclusive Communities decision.  Comments on the ANPR were due by August 20, 2018.  The Rule is the subject of a lawsuit originally filed in June 2013 by the American Insurance Association and National Association of Mutual Insurance Companies in the D.C.… Continue Reading