The US Supreme Court's decision to review a Fair Housing Act case could spur increased action by the CFPB, it has been argued.
The US Supreme Court decided Monday it would review the case of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc. where a large number of minorities claim they would be affected disproportionately by the re-development of their prior blighted housing project in New Jersey.
According to law firm Ballard Spahr, attorneys for one of the defendants in the case, the residential area was occupied by mostly low-to-moderate income minority households that could not afford housing following the re-development of their housing project.
Plaintiffs filed a suit saying the re-development significantly affected minorities, and therefore violated the Fair Housing Act, according to information on Ballard Spahr's website.
The case was previously dismissed by a district court judge, but the US Court of Appeals for the Third Circuit reversed the decision and found that the plaintiffs did establish a case of disparate impact under Fair Housing Act, according to Ballard Spahr.
Ballard Spahr argues, however, that Fair Housing Act should only apply when there is a “refusal to sell or rent after making of a bona fide offer… or otherwise make unavailable or deny a dwelling to any person because of race, sex, color, religion, familial status, or national origin.”
The law firm also noted that this action could spur an increasing number of fair lending-related examinations by the CFPB. The CFPB has already explicitly integrated disparate impact cases in their examinations and this case could make additional changes to the way it treats disparate impact.