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The D.C. district court recently granted two industry trade associations whose members sell homeowners insurance leave to file an amended complaint in their lawsuit challenging the Fair Housing Act (FHA) disparate impact rule (Rule) adopted by the U.S. Department of Housing and Urban Development (HUD).  In their amended complaint, the trade associations allege that the Rule is inconsistent with the U.S.… Continue Reading

The American Bankers Association has sent a letter to the DOJ, Fed, OCC, FDIC, HUD and CFPB requesting confirmation “in interagency guidance, updated exam procedures, and where appropriate amended regulations that the Agencies’ consideration of disparate impact claims in both the supervisory and enforcement context will be governed by standards consistent with the [Supreme] Court’s framework [in Inclusive Communities.]” … Continue Reading

A sharply divided U.S. Supreme Court announced its decision in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. on June 25, 2015, holding that disparate impact claims are cognizable under the Fair Housing Act.

Inclusive Communities does not resolve the question of whether disparate impact claims are cognizable under the Equal Credit Opportunity Act. … Continue Reading

The U.S. Supreme Court ruled this morning that disparate impact claims are cognizable under the Fair Housing Act.  Justice Kennedy wrote the majority opinion in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., in which Justices Ginsburg, Breyer, Sotomayer and Kagan joined.  Justice Alito wrote a dissenting opinion, in which Chief Justice Roberts and Justices Thomas and Scalia joined. … Continue Reading

The U.S. Supreme Court heard oral argument last week in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc.— the case presenting the issue of whether disparate impact claims are cognizable under the Fair Housing Act (FHA).  Two prior cases presenting this issue were settled after merits briefing but before oral argument was heard in the Supreme Court.… Continue Reading

A federal district court in Washington, D.C. dealt a heavy blow on Monday to HUD’s position that disparate impact claims are cognizable under the Fair Housing Act (FHA).  In American Insurance Association v. U.S. Department of Housing and Urban Development, a case we have been watching for some time, the court issued an opinion vacating the HUD disparate impact rule on the ground that “the FHA prohibits disparate treatment only, and that the defendants, therefore, exceeded their authority under the” Administrative Procedure Act. … Continue Reading

Because of their potential impact on the CFPB’s conclusion that the ECOA and Regulation B encompass disparate impact claims, we have been following two insurance industry lawsuits involving a challenge to HUD’s Federal Housing Act (FHA) disparate impact rule, with one lawsuit filed in federal district court in D.C. and the other filed in an Illinois federal district court.… Continue Reading

On March 13, 2014, HUD published a proposal to eliminate the requirement that an FHA loan borrower be required to pay interest after the loan is prepaid.  The move is needed because the requirement would effectively cause FHA loans to be prohibited under CFPB rules starting in January 2015.  Comments on the proposal are due by May 12, 2014.… Continue Reading

Although settlement discussions are continuing, the respondents in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., filed their merits brief with the U.S. Supreme Court on October 21.  (The Township’s opening brief was filed on August 26.)  The question presented in the case is whether disparate impact claims are cognizable under the Fair Housing Act (FHA). … Continue Reading

On June 4, eight industry groups sent a letter addressed to HUD Secretary Shaun Donovan and CFPB Director Richard Cordray requesting much needed written guidance from HUD and the CFPB that makes clear that compliance with the CFPB’s ability-to repay/qualified mortgage (QM) final rule will not expose lenders to disparate impact liability under the Fair Housing Act (FHA) or the Equal Credit Opportunity Act (ECOA).… Continue Reading