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DS News Webcast: Friday 6/4/2015

While mortgage industry stakeholders and lawmakers await the U.S. Supreme Court's decision on whether or not so-called disparate impact claims are allowed under the Fair Housing Act, the U.S. House of Representatives passed an amendment barring the Justice Department for using funds to bring about such claims. Representative Scott Garrett proposed the amendment to H.R.2578, known as the Fiscal Year 2016 Commerce, Justice, and Science Appropriations Act. The act, including Garrett's amendment, passed largely among party lines by a vote of 242 to 173 on Wednesday.

 

The disparate impact issue has become a heated one in the last few years, particularly in housing. The rule allowing disparate impact claims, which are allegations made based on neutral practices that may have a discriminatory effect, was passed by the Obama Administration in February 2013. In early November 2014, U.S. District Judge Richard Leon struck down the disparate impact rule, saying that only claims of direct, intentional discrimination could be made under the Fair Housing Act. The Supreme Court heard arguments in a disparate impact case in January and is expected to make a ruling in July.

 

A federal judge has ruled that the Federal Deposit Insurance Corp. is liable for facing certain legal claims that JPMorgan Chase inherited from its 2008 acquisition of Washington Mutual. The ruling settled a long-standing dispute over who is liable for facing the 10 billion dollar lawsuit, filed in 2009 by Deutsche Bank over faulty mortgage-backed securities issued by WaMu. JPMorgan has contended that the FDIC should be responsible because of its receivership of WaMu which began before JPMorgan acquired the failing Seattle bank, and the FDIC has countered that JPMorgan should pick up the bill.

About Author: Jordan Funderburk

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