The U.S. Department of Housing and Urban Development has issued a final rule encoding concept of disparate impact under the Fair Housing Act, rejecting insurance arguments that including homeowners insurance in the standard undermines the principle of risk-based coverage.

The rule aims to establish uniform standards for when a discriminatory housing practice constitutes an FHA violation. The concept of disparate impact argues that a policy or practice can be deemed legally discriminatory, regardless of its intent.

Ballard Spahr partner Richard Andreano, Jr., said the final rule’s effect could be broad across financial sectors. “Fair housing touches real estate, it touches real estate brokerages, it touched lending,” he said.

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Consumer Financial Services