Wow! After years of battling over what constitutes “disparate impact”, a United States District Court vacated HUD’s rule under the Fair Lending Act (Court Vacates Rule). This is a huge victory for lenders and the MBA, who have fought long and hard against this rule.
HUD’s disparate impact rule opened the door for claims of lending discrimination based on only the effects and not the intent of certain lending activity. The court ruled that the law prohibits only “intentional” behavior and does not address effects based solely on actions. The court said that HUD exceeded its authority in promulgating the disparate impact rule. Lenders and the MBA had contended all along. The case will now go for review before the Supreme Court.
The MBA will continue to take active legal actions until this matter is finally resolved. Their efforts are to have the Supreme Court issue the same ruling as the District Court and to strike down the disparate impact rule because it disparately impacts lenders.
Finally, a win for the lending community, and for those lenders who do business the right way with all good intentions of assisting qualified consumers in realizing their dream of homeownership. Thanks MBA and all those who worked for this hard fought victory. Let’s keep up the good fight.