Reaction to the Supreme Court's decision Thursday on disparate impact varied widely and often reflected the experiences of the speaker. Groups that represented people who have faced housing discrimination favored the ruling, while lenders were critical of it.
In Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, the Supreme Court ruled 6-3 that that the Fair Housing Act allows plaintiffs to cite disparate impact when making discrimination cases under the Fair Housing Act. Disparate Impact is the controversial doctrine that determines whether a policy is discriminatory regardless of its intent.
Marvin Umholtz, founder of the Olympia, Wash.-based Umholtz Strategic Planning & Consulting, took a dim view of the ruling.
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"To the extent that the federal government regulatory agencies, and the Justice Department, ramp up their fair lending enforcement activities, and in doing so leverage the disputed, and probably at-its-core unconstitutional, statistically-based disparate impact theory, the financial services industry is definitely worse off today than it was yesterday," Umholtz told CU Times. "But yesterday wasn't so good either, with the CFPB inventing new ways to apply disparate impact, including using discredited statistical methodologies."
"Also delighted by the SCOTUS majority opinion will be the cottage industry of special interest community and social justice activist groups that are financially and ideologically dependent on using disparate impact to implement their ethnic preferential treatment public policy agendas. It's all about divisive, identity driven political power grabbing."
By contrast, National Community Reinvestment Coalition President/CEO John Taylor was more optimistic about the ruling.
"For many years, the application of disparate impact doctrine has helped to expose housing practices that may appear neutral on their face but have discriminatory effects on protected classes. Housing discrimination today often isn't as blatant as it was in the past, so this is a vital tool for enforcing fair housing law. We applaud the Supreme Court for making the right decision today," he said. "At the same time, we remain vigilant in the cause of fair housing for all Americans. NCRC and our members will continue to work hard every day to create economic fairness and fair access to housing, credit, capital and banking services."
U.S. Attorney General Loretta Lynch also applauded the ruling.
"I am pleased that the Supreme Court has affirmed that the Fair Housing Act encompasses disparate impact claims, which are an essential tool for realizing the act's promise of fair and open access to housing opportunities for all Americans," Lynch said.
"While our nation has made tremendous progress since the Fair Housing Act was passed in 1968, disparate impact claims remain an all-too-necessary mechanism for rooting out discrimination in housing and lending. By recognizing that laws, policies and practices with unjustified discriminatory effects are inconsistent with the Fair Housing Act, today's decision lends support to hardworking Americans who are attempting to find good housing opportunities for themselves and their families," she added, concluding, "Bolstered by this important ruling, the Department of Justice will continue to vigorously enforce the Fair Housing Act with every tool at its disposal – including challenges based on unfair and unacceptable discriminatory effects."
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