Consumer Financial Services Legal Update Blog

Update on the U.S. Supreme Court’s Inclusive Communities Decision

As previously reported on this blog, the U.S. Supreme Court’s decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015) adopted a burden-shifting approach to assessing claims that housing policies cause disparate impact on minority populations in violation of the Fair Housing Act (“FHA”) (42 U.S.C. § 3601). By adopting that approach, the Court confirmed the availability of this form of lawsuit against government entities that implement housing policies.

Update on Proposed Amendments to the Borrower Defense to Repayment Rule

The U.S. Department of Education is continuing to move forward with issuing new regulations regarding the “Borrower Defense to Repayment Rule,” which concerns the ability of a Direct Loan borrower to seek a discharge of a Direct Loan repayment obligations if the educational services provided by a college were in some way deficient. These amendments are potentially important not only to borrowers, but also to colleges and the loan servicing industry.

New York City Defends its Community Preference Policy

On October 2, 2015, the City of New York moved to dismiss a lawsuit accusing the City of unlawfully perpetuating racial segregation in the housing industry. The arguments made by the City offer an important insight into the City Law Department’s view on the Fair Housing Act and disparate impact claims.