A 30-day public comment period ended Friday on the Trump administration’s proposal to remove disparate impact discrimination liability protections under the Fair Housing Act of 1968.
The proposed rule by the U.S. Department of Housing and Urban Development (HUD) aims to leave to the courts “questions related to interpretations of disparate impact liability under the Fair Housing Act.”
Disparate impact discrimination occurs when a seemingly neutral policy or action causes a disproportionate and unjustified negative harm to a group, regardless of intent, according to the Library of Congress.
HUD’s order asserts that disparate impact liability creates a “near insurmountable presumption of discrimination” when there are any differences in outcomes, “even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.”
The proposed rule change was met with opposition from civil rights groups, as well as fair housing, fair lending and social justice organizations. In a letter filed Friday, a coalition of 174 organizations led by the National Fair Housing Alliance (NFHA) insisted that HUD Secretary Scott Turner not finalize the proposed rule eliminating the disparate impact regulations and keep the current rule in place.
Calling disparate impact “one of the most impactful tools used to remove discriminatory barriers to equal access to housing and lending opportunities,” the comment letter maintained that HUD’s plans would “gut a critical tool that protects people from discrimination under the Fair Housing Act of 1968.”
Nikitra Bailey, executive vice president of NFHA, referenced the Supreme Court’s 2015 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project Inc., in which it affirmed that disparate impact claims are valid.
“The Supreme Court has already made it clear that disparate impact is cognizable under the Fair Housing Act,” Bailey stated.
“HUD’s Discriminatory Effects Rule was implemented to provide much-needed clarity on how to apply this important standard,” she continued. “Unfortunately, HUD’s new proposal is just the latest attempt by the administration to muddy the waters and is a dereliction of its responsibilities to fully enforce the Fair Housing Act of 1968.”
In HUD’s proposed rule, it cites President Donald Trump’s executive order titled “Restoring Equality of Opportunity and Meritocracy,” published in April 2025, which stated that equal treatment under the law is a “bedrock principle of the United States” which “guarantees equality of opportunity, not outcomes.”
Among the organizations that signed the letter along with NFHA were the Consumer Federation of America, the National Association of Hispanic Real Estate Professionals, the National Association of Real Estate Brokers, the National Housing Law Project, the National Low Income Housing Coalition, and UnidosUS.
Scotsman Guide reviewed a random sampling of 100 of the 590 public comments submitted to HUD — some of which were shared anonymously — and found 95 of them were opposed to changing the rule.
One of the comments was from Stacy Seicshnaydre, vice dean at Tulane University Law School. She has written several articles on the disparate impact theory under the Fair Housing Act, one of which was cited in the Supreme Court’s 2015 opinion.
Seicshnaydre’s letter to HUD encouraged the department “to abandon the proposed rule. The 2013/2023 Rule is modeled on decades of fair housing precedent, is consistent with Supreme Court doctrine on disparate impact, and accurately reflects the discriminatory effects framework under the FHA. HUD’s rationale for its proposed rule relies more on Executive Order than Supreme Court.”
Seicshnaydre also commented: “HUD’s contention that its Proposed Rule does not ‘affect any rights or obligations,’ is misleading. The Supreme Court recognized disparate impact liability. HUD, in removing references in its regulation to disparate impact liability, does not. HUD refuses to recognize legal rights and obligations under FHA disparate impact liability.”
Cristy Villalobos-Hauser, housing policy adviser at UnidosUS, told Scotsman Guide by email that rolling back the disparate impact standard under the Fair Housing Act “would strip Latino families of a powerful tool to fight systemic housing discrimination and predatory lending like that seen in the 2008 housing crisis.”
“At a time when Latinos are driving homeownership growth — adding more than 441,000 net new homeowners last year — we should be strengthening, not weakening, fair housing protections,” she stated. “At UnidosUS, we remain committed to defending the housing rights that underpin our community’s economic stability and prosperity.”
One of the comments supporting the proposed rule change came from The Center for Equal Opportunity, which “was founded in 1995 to fight racial preferences and promote a race-blind America.” It stated that “civil rights law does not recognize ‘minority neighborhoods’ and ‘majority neighborhoods’ as opposing legal interests. It recognizes individuals, and it prohibits discrimination against them.”
Another supporter of HUD’s rule change was the Appraisal Institute, which commented “on behalf of the more than 16,000 members of the nation’s largest organization of professional real estate appraisers.”
The Appraisal Institute comment stated: “HUD’s proposal appropriately acknowledges that outcome disparities alone are not proof of unlawful discrimination. By rescinding elements of the rule that presume liability based solely on statistical or outcome-based differences, HUD restores a more balanced and legally grounded framework that aligns enforcement with actual misconduct rather than market realities.”
David Gonzalez Rice, senior vice president of public policy at the National Low Income Housing Coalition, told Scotsman Guide that NLIHC’s comments to HUD were “opposing HUD’s abandonment of its responsibility to advance the promise of the Fair Housing Act, one of our nation’s core civil rights laws.
“Despite the Supreme Court’s clear conclusion that the Fair Housing Act extends to discrimination that is hidden and less obvious, HUD is ignoring this decision in service of a broader federal project to curtail civil rights enforcement,” Gonzalez Rice said. He believes that HUD’s actions are short-sighted, and that “HUD’s retreat from fair housing enforcement will simply cause confusion and do nothing to promote housing opportunities for the American people.”
