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Statistics Can Prove Discrimination Under New Rule

FEB 8, 2013 4:33pm ET
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The Department of Housing and Urban Development has finalized a rule that will make it easier for civil rights attorneys to prove that a mortgage company is engaging discriminatory lending practices.

“Through the issuance of this rule, HUD is reaffirming its commitment to enforcing the Fair Housing Act in a consistent and uniform manner,” said HUD secretary Shaun Donovan. “This will ensure the continued strength of one of the most important tools for exposing and ending housing discrimination.”

In a fair lending case, the plaintiffs will not longer have to prove that a lender intentionally discriminated against minorities or other groups. They can show discriminatory impact based on statistics.

Liability under the Fair Housing Act may be established by “showing that a neutral policy or practice has a discriminatory effect even if such a policy or practice was not adopted for a discriminatory purpose,” the final rule says.

Justice Department attorneys have used this legal standard for many years to bring fair lending cases against banks for failing to reach out to minority and low-income neighborhoods.

“HUD is maintaining well-established legal precedent and formalizing a nationally consistent, uniform burden-shifting test for determining whether a given housing practice has an unjustified discriminatory effect,” said John Trasvina, HUD’s assistant secretary for fair housing.

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