HUD Adopts Disparate Impact Rule To Clarify Fair Lending Law

Law360, New York (February 8, 2013, 6:08 PM EST) -- The U.S. Department of Housing and Urban Development on Friday finalized a long-awaited rule defining disparate impact under federal fair housing law, which the agency hopes will bring clarity to an unsettled area of the law.

The rule sets up a three-part test that regulators and courts will be able to use to determine whether decisions by lenders not to issue mortgages unfairly target borrowers based on race, color, religion, gender, handicap, familial status or national origin. If the lending policy fails the three-part test, lenders...
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