The Rapidly Changing Fair Housing Landscape: HUD Rescinds Obama-Era AFFH Fair Housing RuleThe Trump administration recently announced that it has rescinded Affirmatively Furthering Fair Housing (AFFH), an Obama-era regulation intended to ensure compliance with the Fair Housing Act (FHA). AFFH requires cities and towns to analyze local housing data for discriminatory patterns and submit plans to address those issues in order to continue receiving federal funding. This rescission represents a major rollback of a fair housing enforcement mechanism.

This rescission is not altogether unexpected: HUD effectively suspended the rule in January 2018, when it issued a notice delaying the requirement that municipalities submit proposed plans until after October 31, 2020. The AFFH will be replaced with the “Preserving Community and Neighborhood Choice” rule, which defines fair housing much more broadly as “affordable, safe, decent, free of unlawful discrimination, and accessible under civil rights laws.” Most importantly, the new rule would allow municipalities the ability to self-certify compliance.

The rollback of the AFFH, and its replacement, is part of the current administration’s efforts to ease regulatory burdens on certain stakeholders. For instance, and as we have previously discussed, HUD has proposed a rule that may make it more difficult for litigants to make a prima facie case of disparate impact housing discrimination. Despite opposition from consumer and some industry members, it appears that HUD is moving forward with a final rule implementing this change.

Despite this trend, the fact remains that we are in an election year, and there’s a chance that a new administration will take office in January 2021. And while it would take time and effort for a Joe Biden-era HUD to reverse some of these trends through formal rulemaking, there are already indications that political will exists to do so. For instance, Rep. Alexandria Ocasio-Cortez has introduced amendments to a pending appropriations bill restricting the use of federal funds to support HUD’s implementation of the new proposed rules, which would effectively nullify them.

Given the current election-year uncertainty, it remains to be seen whether the new disparate rule will go into effect, and if so, how long it will last. In the meantime, lenders and other stakeholders should continue to monitor the rapidly evolving fair housing and fair lending landscape to ensure compliance with federal regulations and to anticipate upcoming changes. We will also continue to monitor the space and provide timely updates.

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Photo of Christopher K. Friedman Christopher K. Friedman

Chris Friedman is a regulatory compliance attorney and litigator who focuses on helping consumer finance companies and small business lenders, as well as banks, fintech companies, and other participants in the financial services industry, address the challenges of operating in a highly regulated…

Chris Friedman is a regulatory compliance attorney and litigator who focuses on helping consumer finance companies and small business lenders, as well as banks, fintech companies, and other participants in the financial services industry, address the challenges of operating in a highly regulated sector. Chris focuses on both small business lenders and alternative business finance products and has helped non-bank small business lenders, banks who make small business loans, commercial credit counselors, lead generators, and others in the industry. He helps clients launch new products, conduct due diligence, engage in compliance reviews, evaluate litigation risk, and solve some of the unique legal problems faced by companies who work with small businesses. In that vein, Chris has written extensively about the upcoming rulemaking related to Dodd-Frank 1071, which will require data collection and reporting by companies making loans to certain small businesses.

Photo of Benjamin William Perry Benjamin William Perry

Ben Perry’s practice spans the spectrum of legal services. On the litigation side, Ben represents clients at the trial and appellate level against a wide variety of claims in state and federal courts. His practice primarily concentrates on complex civil litigation, products liability…

Ben Perry’s practice spans the spectrum of legal services. On the litigation side, Ben represents clients at the trial and appellate level against a wide variety of claims in state and federal courts. His practice primarily concentrates on complex civil litigation, products liability defense, and representing financial institutions and mortgage companies in civil litigation. As part of the Banking and Financial Services Practice Group, he defends mortgage servicers, investors, and related entities against numerous state and federal law claims arising out of lending and loan servicing practices, including alleged violations of the Telephone Consumer Protection Act (TCPA) and various claims relating to the sale of bank-owned real estate. Ben also has substantial experience defending banks and investors in hundreds of cases related to homeowner’s association (HOA) superpriority liens, and he has represented a company’s founder and CEO facing claims brought by the SEC for alleged embezzlement of company funds.

Photo of Alex McFall Alex McFall

Alex McFall primarily represents banks, servicers and other financial institutions in civil litigation, with an emphasis in residential and commercial lending. Alex has defended financial institutions against claims for breach of contract, fraud, alleged violations of the Truth in Lending Act (TILA), Fair…

Alex McFall primarily represents banks, servicers and other financial institutions in civil litigation, with an emphasis in residential and commercial lending. Alex has defended financial institutions against claims for breach of contract, fraud, alleged violations of the Truth in Lending Act (TILA), Fair Debt Collection Practices Act (FDCPA), Real Estate Settlement Procedures Act (RESPA), Fair Credit Reporting Act (FCRA), Telephone Consumer Protection Act (TCPA), and Fair Housing Act (FHA). She has substantial experience defending financial institutions in HOA super-priority lien litigation and has contributed frequently to the firm’s Financial Services Perspectives blog regarding super-priority lien litigation.