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CUNA, Trades Back HUD Housing Policy Fix
WASHINGTON (7/31/13)--The Credit Union National Association Tuesday joined a number of trade organizations to support Rep. Scott Garrett (R-N.J.) for introducing an amendment that would fix a potentially troublesome change to the Fair Housing Act, and to urge U.S. House members to support the amendment.

Garrett's amendment could be added to H.R. 2610, the Transportation-HUD Appropriations Act for Fiscal Year 2014.

The U.S. Department of Housing and Urban Development (HUD) has proposed a regulation that would create liability for housing policies or practices that have a "disparate impact" on a protected class, even when there is no intent to discriminate. "Under this rule, even when a mortgage lender, apartment owner, apartment manager or housing cooperative takes every step to prevent discrimination and treats all consumers fairly and equally, a neutral policy can serve as a basis for very serious and harmful claims in the absence of intentional discrimination. This would make it harder for families to buy or rent a home," the CUNA letter stated.

CUNA and co-signers noted that their member companies "use facially neutral standards, such as loan-to-value ratios and debt-to-income ratios in mortgage underwriting and for resident screening purposes because they are neutral and nondiscriminatory."

Under the proposed HUD rule, lenders, apartment owners, apartment managers or housing cooperatives could be challenged if these practices yield different results for a protected class, and also face severe reputational harm and significant costs of defense.

"This would force them to allocate lending or leases to all groups equally, regardless of the demonstrable differences in risk," and force them to use quotas to make sure each group gets exactly the same share of loans and leases. Such an act, the letter noted, is intentional discrimination.

"Intentional housing discrimination is exactly what Congress outlawed in 1968. It has no place whatsoever in this country," the letter said.

The letter is co-signed by the American Financial Services Association, Community Home Lenders Association, Consumer Mortgage Coalition, Council for Affordable and Rural Housing, Financial Services Roundtable, Housing Policy Council, Independent Community Bankers of America, Mortgage Bankers Association, National Affordable Housing Management Association, National Apartment Association, National Association of Federal Credit Unions, National Association of Housing Cooperatives, National Leased Housing Association and National Multi Housing Council.

For the full letter, use the resource link.
Other Resources

Garrett Letter

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