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

ABA urges FCC to modernize calling rules, strengthen fraud protections

ABA supports issuance of ‘know your upstream provider’ proposal

Compliance and Risk
May 13, 2026

ABA expressed its support for FCC Chairman Brendan Carr’s decision to schedule a May 20 vote on issuing a proposal that would impose stronger “know your upstream provider” requirements on voice service providers that allow calls to pass...

ABA, associations urge Congress to overturn CFPB credit card late fees rule

House committee advances ABA-backed bills on bank supervision, fighting scams

Compliance and Risk
May 13, 2026

The House Financial Services Committee advanced two bills supported by ABA as part of a package of proposed legislation on topics ranging from fighting scams to AI. Both bills passed by unanimous vote.

Fed chair nomination hearing scheduled for next week

Senate confirms Warsh as Fed chairman

Economy
May 13, 2026

The Senate voted 54-45 to confirm Kevin Warsh as the next chairman of the Federal Reserve. The Senate confirmed his appointment to the Fed board on Tuesday.

Producer price index increased 0.5% in April

Producer prices rose 1.4% in April

Economy
May 13, 2026

The Producer Price Index for final demand increased 1.4% in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. On an unadjusted basis, the index for final demand rose 6% for the 12 months ending in April.

Fed survey: Unbanked status continues to vary among income, ethnic groups

Fed survey: Unbanked rate little changed in 2025

Compliance and Risk
May 13, 2026

Roughly 6% of U.S. adults were unbanked last year, a figure that has held steady since 2021. The Fed survey also polled respondents on experience with scams, credit availability and cryptocurrency use.

CFPB’s Chopra says agency will move forward with rulemakings

Chopra to lead new California agency overseeing banks

Compliance and Risk
May 13, 2026

California Gov. Gavin Newsom has appointed former Consumer Financial Protection Bureau Director Rohit Chopra to lead the state’s new business regulation and consumer protection agency, according to an announcement.

NEWSBYTES

ABA supports issuance of ‘know your upstream provider’ proposal

May 13, 2026

House committee advances ABA-backed bills on bank supervision, fighting scams

May 13, 2026

Senate confirms Warsh as Fed chairman

May 13, 2026

SPONSORED CONTENT

Credit Memos at the Convergence Point

Credit Memos at the Convergence Point

May 1, 2026
Digital Account Opening: Think Outside the Box for Maximum Business Impact

Digital Account Opening: Think Outside the Box for Maximum Business Impact

April 29, 2026
Why Your Systems Keep Slowing Down — and What to Do About It

Why Your Systems Keep Slowing Down — and What to Do About It

April 21, 2026
Planning Your 2026 Budget? Allocate Resources to Support Growth and Retention Goals

How leading banks are enhancing customer engagement through financial data insights

April 10, 2026

PODCASTS

Podcast: How an Ohio banker talks with policymakers about stablecoin issues

May 6, 2026

Podcast: Tech transformation and AI to power bank growth

April 29, 2026

Podcast: ABA’s ecosystem strategy to tackle fraud

April 22, 2026

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

© 2026 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

© 2026 American Bankers Association. All rights reserved.