WASHINGTON — The Supreme Court said Monday it will take up a case to decide whether an individual may allege discrimination under the Fair Housing Act based solely on the impact of a policy, rather than the intent.
The case is being closely watched by the banking industry as the Justice Department continues to target lenders for fair lending violations resulting from policies that had a disparate impact on a group of borrowers. The industry has argued that the Fair Housing Act does not permit claims of discrimination if there was no intent to discriminate.
In the case of Gallagher v. Magner, a group of landlords alleged that officials in St. Paul, Minn., targeted rental properties for housing code violations, which increased the burden on property owners and had a disparate impact on African-American tenants. The Eighth Circuit Court in Minnesota upheld the landlords' claim, even though there was no evidence that the city intended to discriminate.
The Supreme Court will review whether disparate claims are allowed under the law, and what test should be used to analyze them.
