HUD Finalizes Disparate Impact Rule

The U.S. Department of Housing and Urban Development (HUD) has finalized a rule titled “Reinstatement of HUD’s Discriminatory Effects Standard.” The Department has posted a pre-publication copy of the final rule on its website. The rule will go into effect 30 days after it has been published in the Federal Register.

The current final rule would recodify a 2013 rule on disparate impact. The 2013 rule is titled “Implementation of the Fair Housing Act’s Discriminatory Effects Standard.” The 2013 rule was altered by a rule published in 2020 titled “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard.” The 2020 rule would have made significant changes to, among other things, a three-part burden-shifting test that determined whether a particular practice had an “unjustified discriminatory effect.”

A federal court stayed the implementation and enforcement of the 2020 rule, so the 2013 rule remained in effect, and will continue to remain in effect with this final rule which “reinstates and maintains the 2013 rule.”

The pre-publication copy of the final rule can be found here.