DateIssued:April23,2025
Topic:CivilRights
WHATDOESTHISEXECUTIVEORDERDO?
Thisexecutiveordereliminatesdisparateimpactliabilityinthefederal government,alegaldoctrinethatprohibitsorganizationsfromadopting policiesthatwoulddisproportionatelyharmmarginalizedgroups.
ThisorderrepealsseveralprovisionsoftheCivilRightsActof1964and willaltertheenforcementoftheFairHousingAct(FHA)andtheEqual CreditOpportunityAct(ECOA).CongressoriginallypassedtheFHAand ECOAtopreventdiscriminationinhousingandlending.TheDepartment ofHousingandUrbanDevelopment(HUD)andtheFederalTrade Commission(FTC),whichenforcetheFHAandtheECOArespectively, haveuseddisparateimpactliabilitytoholdmortgagecompaniesand creditorsaccountablewhentheydisproportionatelyharmmembersof protectedclasses.Withoutdisparateimpactliability,theagencieswill nowhavetoprovemaliciousintentinordertopunishbadfaithactors, whichrequiresamuchhigherburdenofproofandwillleadtomore instancesofuncheckeddiscrimination.
Thisexecutiveorderwillbeenforcedbyallfederalagencyheads.
TheorderinstructsfederalagencyheadstosendthePresidentalistofall practicesthatarebasedondisparateimpactliabilityandtheirplanto repealthemwithin30daysofthisorder’sissuance.
TheorderdirectstheAttorneyGeneral,theSecretaryofHUD,theDirector oftheConsumerFinancialProtectionBureau,andtheChairoftheFTCto examineanypendinginvestigationsorlawsuitsthatwerefiledin accordancewithdisparateimpactliabilityand“takeappropriateaction” inserviceoftheAdministration’spolicytoeliminatethedoctrinewithin45 daysoftheorder’sissuance.
TheorderalsoinstructstheAttorneyGeneraltoaudittheuseofdisparate impactliabilityonthestatelevelanddetermineifthestateshave “constitutionalinfirmitiesthatwarrantFederalaction.”
TheordertaskstheAttorneyGeneralandtheChairoftheEqual EmploymentOpportunityCommissionwithdevelopingguidanceon promotingequalaccesstofederalemploymentforapplicantswhohave notobtainedcollegedegrees.
Disparateimpactliabilityhaslongservedasanaccountabilitymetricfor federalagencies,safeguardingwomen,communitiesofcolor,andother protectedclassesfromundueharmfromthegovernmentandprivate companies.ThedoctrinewasfirstestablishedintheCivilRightsActof 1964tohelpendracialsegregationandexpandcareerandeducational opportunitiesforBlackAmericans.Itisatheoryofdiscriminationwhere entitiesareliablefortheirpolicies’impactonmarginalizedgroups,evenif thepoliciesareraceneutral.Itisinstrumentaltotheenforcementofthe CivilRightsAct.
CongresspassedtheFairHousingAct,alsoknownastheCivilRightsAct of1968,toaddressracialdiscriminationinmortgagelendingandrental practices.Beforethelegislationbecamelaw,mortgagecompaniesand realtorsengagedinredlining,thesystemicdevaluationofhomesinBlack neighborhoodsandthedenialofloansandinsurancecoveragebasedon race.Thelocationofone’shomedoesnotonlyaffectone’sproximityto goodsandservices,italsodetermineshealthoutcomesandqualityof education.
UndertheFHA,HUDinvestigatesclaimsofhousingdiscrimination,and theDepartmentofJusticeisauthorizedtobringchargesagainst predatoryactors.Historically,thedisparateimpactliabilityframework hasprovidedextraprotectiontocomplainants,asitallowedthose intentionallyharmed,aswellasthosewhosufferedduetosystemic bias,toseekjustice.Theeliminationofdisparateimpactliability restrictsfederalagenciesfrominvestigatingandprosecutingnongovernmentalentitiesthatdiscriminateagainstprotectedclasses.
WhileBlackhomeownershipgrew20%from1950to1970,theratehas sincestagnated.Forty-onepercentofBlackpeopleownedtheirown homesin1970comparedto44%in2021.Incontrast,73.3%ofnonHispanicwhitepeopleownedahomein2023.Becauseofthis executiveorder,HUDmaynotconsiderracialdisparitiesinanyofits policiesorfullyexaminetheimpactsofhousingdiscriminationon BlackAmericans.