POLITICO: HUD proposes rule setting higher bar for housing discrimination claims

POLITICO, August 16, 2019: HUD proposes rule setting higher bar for housing discrimination claims

The Department of Housing and Urban Development released a proposed rule Friday that would make it more difficult to bring discrimination claims under the Fair Housing Act, a move that is drawing protests from civil rights groups.

The proposed rewrite of a 2013 HUD rule would require plaintiffs to clear a higher bar to prove unintentional discrimination — known as disparate impact — and give defendants more leeway to rebut a claim. It was published on Friday following a 15-day congressional review period.

In cases where an algorithm is at issue, for instance, a defendant can rebut the claim by providing the model and showing that the inputs do not rely on proxies for protected classes and that the model legitimately predicts something like credit risk.

“The bar was already set high and HUD‘s proposal would put it in the stratosphere — it really strains credulity,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition.

“Proprietary algorithms are proliferating, in loan underwriting for example, and HUD’s proposal will make it even harder to challenge outcomes from those systems even when the impact on consumers and borrowers is clearly discriminatory,” Van Tol added.

 

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