Attorney General Kwame Raoul, in conjunction with the District of Columbia Attorney General Brian Schwalb, has spearheaded a coalition of 19 attorneys general in support of the Department of Housing and Urban Development's (HUD) Discriminatory Effects Rule. This legal effort, as reported by the Illinois Attorney General’s Office, is aimed at contesting the challenge posed by the homeowners insurance industry. The rule challenged clarifies that insurers are accountable under the Fair Housing Act for housing practices that, while ostensibly neutral, are discriminatory and generate a disparate impact on specific populations.
"Accessible homeowners insurance is critical to ending housing discrimination," Raoul stated. He further asserted that preventing the enforcement of federal liability against what are, in effect, discriminatory insurance policies would undermine the progress made by states like Illinois to combat housing discrimination. The insurance industry's lawsuit contends that HUD was remiss in not providing a blanket exemption for homeowners insurance against the rule, in light of potential conflicts with state-level insurance laws and regulations, arguing instead for a case-by-case approach.
Raoul's rationale, backed by his coalition in a brief filed in the U.S. Court of Appeals for the 7th Circuit, centers on the compatibility of HUD's rule with states' anti-discrimination laws and insurance market regulation efforts. The coalition contests the plaintiffs’ view that the rule overreaches into state-level insurance regulation, highlighting the synergy between HUD's rule and state laws in many jurisdictions, including Illinois. They argue that the existence of state rules precluding disparate-impact liability for some states does not justify exempting an entire industry from such liability nationwide.
Last year, a separate coalition of attorneys general, also led by Raoul, submitted a brief to the trial court defending HUD's rule implementation approach. The trial court's opinion acknowledged the contribution of this brief, describing it as significant in determining that HUD’s approach was reasonable. The attorneys general involved in the Coalition include representatives from states such as Arizona, California, Colorado, and several others across the nation. Their stance insists that national-level protections against discriminatory housing practices must remain intact, complementing state-level mechanisms where applicable.
