Advocates: Eliminating key legal standard could leave communities at risk
President Donald Trump issued an executive order last week that critics say will weaken protections against discriminatory practices in housing and lending, raising concerns about a widening racial wealth gap.
The order directs federal agencies, including the US Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau (CFPB), to limit the use of “disparate impact” analysis. The National Consumer Law Center (NCLC) highlighted in a statement that this legal standard has been a critical tool for identifying discriminatory policies that disproportionately affect certain groups, even without explicit evidence of intent.
Under the new directive, agencies would only act against discrimination when intentional wrongdoing can be clearly proven. Civil rights advocates warn that this shift could make it significantly harder to challenge systemic biases in housing, lending, and credit reporting.
“Disparate impact liability is a bedrock principle in ensuring fair and equal access to safe housing and affordable credit,” said Odette Williamson, senior attorney at the NCLC and director of its Racial Justice and Equal Opportunity Project. “Eliminating this standard in the federal agencies is a continuation of the Trump Administration’s all-out assault on equity, civil rights, racial justice, and the rule of law.”
A discrimination against people of color?
According to the NCLC, disparate impact claims have historically allowed individuals to challenge practices that result in discrimination against people of color, people with disabilities, families with young children, and women. Without this standard, many discriminatory policies may go unchecked, even when their harmful effects are well documented.
During the subprime mortgage crisis leading up to the 2008 financial collapse, communities of color were disproportionately targeted with high-risk, high-cost loans, the NCLC noted.
The Administration has defended the executive order as a move toward “meritocracy and a colorblind society.” However, Williamson countered that view, stating, “Whether intentional or not, discrimination in housing, lending, and credit reporting is a reality for millions of people, and government oversight and regulation is an essential weapon in the ongoing work of dismantling deeply entrenched problems.”
Advocates are calling for urgent action from Congress and state governments to maintain and strengthen protections against discrimination. They argue that preserving the ability to bring disparate impact claims is critical for continuing the progress made in advancing civil rights and economic justice.
The NCLC and other civil rights organizations advocate for strong enforcement of anti-discrimination laws amid what they describe as mounting challenges to long-standing civil rights protections.
What are your thoughts on the potential impact of this executive order? Share your insights below.
