The U.S. Department of Housing and Urban Development (“HUD”) has finally issued its much-debated disparate impact rule. HUD argues that the rule — which it plans to apply retroactively — is simply a codification of its existing position that the Fair Housing Act authorizes disparate impact claims. But the rule goes well beyond that. It articulates a burden-shifting framework that places significant new legal burdens onto defendants, and it “clarifies” the standard for “business justification” that HUD had originally proposed into a test that courts have affirmatively rejected.

The New Rule -

HUD is charged with interpreting and enforcing the Fair Housing Act (“FHA”). The new rule adds a provision entitled “Prohibiting Discriminatory Effects” to HUD’s existing FHA regulations. Under the new provision, a defendant may be liable for practices with a discriminatory effect unless there is a legally sufficient justification. The showings and burdens of proof unfold as follows...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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