HUD fair housing complaint against Facebook came via a rare source

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The Department of Housing and Urban Development took the very rare step of filing a secretary-initiated fair housing complaint — only three were made in the last two fiscal years — against Facebook.

HUD's move, along with a separate statement of interest by the U.S. Attorney for the Southern District of New York in a case filed by fair housing advocates, indicated the practices allegedly continued even after Facebook reported disabling those features after their existence became common knowledge nearly two years earlier.

The agency filed only one secretary-initiated complaint in fiscal year 2017 and two the year before that. There were over 8,300 complaints filed in total in fiscal year 2016.

After the initial article by ProPublica appeared in October 2016, Facebook's ethnic attributes selections were supposed to have been disabled, the company said in November of that year. Advertisers could select who could or couldn't see marketing materials, but several selections allegedly violated the rights of protected classes under the Fair Housing Act.

But this past March, Facebook was sued by the National Fair Housing Alliance and others over the ability for marketers to use those selections. The U.S. Attorney's statement of interest, which HUD also joined, was filed in support of that case.

HUD and the U.S. Attorney's actions validate the National Fair Housing Alliance's case, the group said in a statement.

"Facebook's system is essentially a modern-day, high-tech method of allowing restrictive covenants that discriminate against protected classes under the Fair Housing Act," said Lisa Rice, president and CEO of the National Fair Housing Alliance. "Facebook has created and operates one of the largest advertising companies in the world. They should be using their vast resources to create more open markets free from discrimination. Instead, it has harnessed its troves of data in a way that perpetuates systemic bias in our nation's housing markets."

"The Fair Housing Act prohibits housing discrimination including those who might limit or deny housing options with a click of a mouse," said Assistant Secretary for Fair Housing and Equal Opportunity Anna Maria Farias in a press release. "When Facebook uses the vast amount of personal data it collects to help advertisers to discriminate, it's the same as slamming the door in someone's face."

The Fair Housing Act makes it "unlawful to make, print or publish … [an] advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation or discrimination because of race, color, religion, sex, handicap, familial status or national origin." The law applies to mortgage companies' marketing and advertising.

"The Center for Responsible Lending believes that both the spirit and letter of the Fair Housing Act be embraced by the entire nation," said Debbie Goldstein, executive vice president. "Every marketing strategy must take into account whether its practices violate this important law. If the effects of this or other advertising strategies are found to violate laws, timely, thorough and corrective actions must be taken."

Facebook allowed advertisers to select which persons would or wouldn't be allowed to see the marketing. It promoted the program with "success stories" for finding "the perfect homeowners," "reaching home buyers," "attracting renters" and "personalizing property ads," the HUD complaint alleged.

After the 2016 article appeared, several consumers sued in the Northern District of California seeking class action status alleging violations of the Fair Housing Act; that case is in settlement negotiations, according to court filings.

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Enforcement Fair Housing Act Marketing Originations Mortgage technology Compliance Housing Facebook HUD DoJ