ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
Home Compliance and Risk

Supreme Court Recognizes Disparate Impact Under FHA

June 25, 2015
Reading Time: 2 mins read

Case: Texas Department of Housing & Community Affairs, et al. v. Inclusive Communities Project, Inc., et al.

Issue: Whether disparate impact claims are cognizable under the Fair Housing Act (FHA).

Case Summary: The U.S. Supreme Court ruled that disparate impact claims may be alleged under the FHA.

Inclusive Communities Project, Inc. (ICP) brought a disparate impact claim challenging the Texas Department of Housing and Community Affairs’ (TDHCA) distribution of affordable housing credits. ICP alleged that TDHCA’s distribution of credits caused segregated housing patterns by disproportionately approving tax credits for housing in predominantly black inner-city areas, but disproportionately denying tax credits in predominately white suburban neighborhoods.

The district court ruled in favor of ICP and ordered TDHCA to include new selection criteria for distributing the housing credits. The Fifth Circuit affirmed that disparate impact claims are cognizable under the FHA, but on the merits, the Fifth Circuit reversed and remanded in light of the U.S. Department of Housing and Urban Development’s (HUD) disparate impact rule. The U.S. Supreme Court subsequently granted TDHCA’s certiorari petition asking the Court to decide whether disparate impact claims are cognizable under the FHA.

In a 5-4 decision written by Justice Anthony Kennedy, the U.S. Supreme Court upheld the Fifth Circuit’s ruling that disparate impact claims are cognizable under the FHA. In reaching its decision, the Court relied on two prior cases, Griggs v. Duke Power Co. and Smith v. City of Jackson, which affirmed disparate impact claims under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 (ADEA). The Court held that antidiscrimination laws should be interpreted to encompass disparate impact claims based upon their results-oriented language. In addition, the Court relied on the FHA’s legislative history when Congress ratified disparate impact claims in its 1988 Amendments.

The Court also reiterated the limits of disparate impact. The Court explained that plaintiffs must specifically identify the policy that caused the racial disparity. The Court reasoned that disparate impact liability must be limited to artificial, arbitrary and unnecessary barriers to ensure a vibrant and dynamic free-enterprise system.

Bottom Line: This decision ends the legal challenge to disparate impact under the FHA. Legislative relief is the only viable avenue for those looking to repeal the law or void the ruling.

Tags: Disparate impactFair lending
ShareTweetPin

Author

Thomas Pinder

Thomas Pinder

Thomas Pinder is senior vice president and deputy general counsel at ABA.

Related Posts

FDIC posts sample docs to provide clarity into marketing, sale process of failing banks

FDIC posts sample docs to provide clarity into marketing, sale process of failing banks

Newsbytes
December 31, 2025

Eleven new sample documents were released, covering franchise sales and loan pools, including purchase and assumption agreements, confidentiality agreements and financing terms.

Green Dot agrees to pay Federal Reserve $44 Million to resolve UDAP allegations.

Minutes: FOMC takes wait-and-see approach to future rate cuts

Economy
December 30, 2025

FOMC members agreed further cuts of federal funds rate in the near future “would likely be appropriate" if inflation declines as expected, while some members recommended keeping the target range “unchanged for some time” to allow policymakers to...

Agencies propose highly anticipated CRA overhaul

CRA small-bank asset-size thresholds updated for 2026

Newsbytes
December 30, 2025

The Federal Reserve and FDIC today released the updated Community Reinvestment Act “small-bank” and “intermediate small-bank” asset-size thresholds for 2026. The thresholds, which ticked up slightly for the coming year, are adjusted annually.

ABA files amicus brief urging Eighth Circuit to reverse district court’s dismissal of NSF fee lawsuit

ABA offers changes to FDIC, OCC proposed safety and soundness rules

Community Banking
December 29, 2025

ABA suggested changes for the agencies' proposed rule regarding unsafe or unsound practices, as well as revisions to the supervisory framework for issuing matters requiring attention and other supervisory communications.

OCC proposes to cite federal preemption of state interest-on-escrow laws

OCC proposes to cite federal preemption of state interest-on-escrow laws

Compliance and Risk
December 23, 2025

The OCC is proposing two rules to clarify that national banks are exempt from state laws regulating real estate escrow accounts. ABA welcomed the proposals.

CFPB issues decision on TILA preemption of state laws

Democratic state AGs file lawsuit to stop CFPB’s ‘complete defunding’

Legal
December 23, 2025

A coalition of 22 Democratic state attorneys general filed a lawsuit against the Trump administration to stop what they said was the “complete defunding” of the CFPB.

NEWSBYTES

FDIC posts sample docs to provide clarity into marketing, sale process of failing banks

December 31, 2025

Minutes: FOMC takes wait-and-see approach to future rate cuts

December 30, 2025

CRA small-bank asset-size thresholds updated for 2026

December 30, 2025

SPONSORED CONTENT

Seeing More Check Fraud and Scams? These Educational Online Toolkits Can Help

Seeing More Check Fraud and Scams? These Educational Online Toolkits Can Help

November 1, 2025
5 FedNow®  Service Developments You May Have Missed

5 FedNow® Service Developments You May Have Missed

October 31, 2025

Cash, Security, and Resilience in a Digital-First Economy

October 20, 2025
Rethinking Outsourcing: The Value of Tech-Enabled, Strategic Growth Partnerships

Rethinking Outsourcing: The Value of Tech-Enabled, Strategic Growth Partnerships

October 1, 2025

PODCASTS

Podcast: Cybersecurity in a mobile-first banking landscape

December 18, 2025

Podcast: The 2026 outlook for bank M&A

December 11, 2025

Podcast: The outlook for tech-forward community banking

December 4, 2025

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.