Attorney General Kris Mayes has joined a coalition of 18 attorneys general in filing an amicus brief urging a federal court to reject a challenge to the Department of Housing and Urban Development’s (HUD) Discriminatory Effects Rule. The homeowners insurance industry is challenging the rule, which under the Fair Housing Act, holds insurers and other parties liable for housing practices that may appear neutral but are discriminatory and have a “disparate impact” on certain populations.
“Now more than ever, it’s vital that we push back on any discriminatory housing practices. Whether it’s lenders, insurers or price-fixing schemes – there is no excuse or place for these unfair practices in Arizona, or across our nation,” said Attorney General Mayes.
Courts have long recognized that the Fair Housing Act prohibits housing practices that, while not overtly discriminatory, have a disparate impact on individuals based on race, national origin or other protected characteristics. However, a trade association representing property and casualty insurance companies sued to have HUD’s Discriminatory Effects Rule declared invalid as it applies to homeowner's insurers. The insurers argued that HUD should have granted a blanket exemption to the rule and its failure to do so makes the rule invalid for multiple reasons, including because many states require insurers to rely only on market-based factors in making underwriting decisions.
Attorney General Mayes and the coalition filed their brief in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that disparate-impact liability is a critical tool to fight housing discrimination, which remains a major cause of widespread residential segregation. Attorney General Mayes and her colleagues explained that laws in many states already impose disparate-impact liability on entities in the housing industry; thus, they argue that invoking state law as a basis for exemption is incorrect.
Arizona’s fair housing laws are substantially similar to federal laws underpinning HUD’s Discriminatory Effects Rule. Studies indicate Arizonans continue to be impacted by historical discriminatory housing practices such as restrictive covenants and lending policies. The Attorney General’s Civil Rights Division actively combats housing discrimination within Arizona. According to Mayes, HUD’s Discriminatory Effects Rule is essential in efforts to eliminate unfair housing practices.
Joining Mayes in filing the brief are attorneys general from California, Colorado, Delaware, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York North Carolina Oregon Pennsylvania Rhode Island Washington Raoul Schwalb