The Department of Housing and Urban Development (HUD) on August 4 submitted a final rule on “disparate impact” to the White House’s Office of Management and Budget (OMB), which will review the rule change for publication. Disparate impact refers to a method of proving discrimination based on outcomes rather than intent; it applies when a seemingly neutral policy disproportionately harms a protected group.

The new rule, titled “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard,” comes on the heels of an April executive order by President Trump rejecting the use of disparate impact policies: “It is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible,” states Executive Order 14281.

The text of the final rule awaiting OMB approval is not yet publicly available, but the previous Trump administration had also sought to fundamentally change the use of the disparate impact standard in America.

The rule sent to OMB for approval bypasses the usual proposed rule phase and will not allow for public comment; however, the Supreme Court upheld the use of disparate impact in 2015, and HUD has interpreted the Fair Housing Act as prohibiting disparate impact for over 40 years, meaning that any fundamental rule change in 2025 could face significant legal challenges.

LeadingAge fully supports disparate impact as a key measure of housing discrimination and will monitor the administration’s actions to change or remove disparate impact liability.