Disparate Impact. Although persons with criminal histories are not designated members of a protected category, HUD interpretation of the Fair Housing Act set forth in the Guidance appears likely to be upheld based upon the Supreme Court’s decision in Texas Dep't of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 000 X. Xx. 2507, 192 L. Ed. 2d 514 (2015) holding that disparate-impact claims are cognizable under the Fair Housing Act. Inclusive Communities involved allocation of low income housing tax credits in a manner that resulted in a disparate impact on African American residents, promoting their continued residence in segregated, inner city neighborhoods. Citing Xxxxxx x. Xxxx Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971) and the plurality opinion in Xxxxx v. City of Xxxxxxx, 544 U.S. 228, 125 S.Ct. 1536, 161 L.Ed.2d 410 (2005), Inclusive Communities held that, “antidiscrimination laws must be construed to encompass disparate-impact claims when their text refers to the consequences of actions and not just to the mindset of actors, and where that interpretation is consistent with statutory purpose.” 135 S. Ct. at 2518.
Disparate Impact. If a policy or practice does not discriminate on a prohibited basis, but has the result or effect of treating protected classes adversely on a prohibited basis (commonly known as “disparate impact” or “disparate effect”), the creditor may have violated the ECOA and Reg. B. The creditor with such a policy or practice does not need to intend to discriminate in order for there to be a violation. If the policy or practice has a discriminatory effect or impact on a prohibited basis, it may be a violation.
