The Department of Housing and Urban Development has finalized a federal regulation it says introduces uniform "disparate-impact" criteria to the sale of homeowners insurance, prompting claims of "regulatory overreach" by industry officials.
According to HUD, the rule establishes a consistent standard for assessing claims that a facially neutral practice violates the Fair Housing Act.
Under a three-part test, the charging party or plaintiff first bears the burden of proving its prima facie case that a practice results in, or would predictably result in, a discriminatory effect on the basis of a protected characteristic. At the same time, HUD says that a housing practice with a discriminatory effect would still be lawful if supported by a "legally sufficient justification."
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