Vote Delayed on Accord to End Top Court Housing-Bias Case

A New Jersey town council will postpone a vote on a proposal to settle a U.S. Supreme Court case that has threatened to undercut the Obama administration’s crackdown on lending discrimination.

The town of Mount Holly had scheduled a meeting tonight to consider what it called a tentative settlement in the housing-bias case. The council now won’t vote tonight, James Maley, one of the town’s lawyers in the case, said in an e-mail.

The reasons behind the delay aren’t substantive, said a lawyer involved the case who asked not to be identified.

An accord would avert what might have been a major change in the enforcement of the 1968 Fair Housing Act. The town has asked the court to rule that people suing under the law must prove intent to discriminate and not just show that a policy has had a disproportionate effect on racial minorities.

President Barack Obama’s administration has repeatedly used what are known as “disparate impact” arguments in lawsuits against banks over housing and auto loans. Bank of America Corp., Wells Fargo & Co. and SunTrust Banks Inc. have agreed to pay at least $480 million to settle claims since December 2011.

The Consumer Financial Protection Bureau has also embraced the disparate-impact approach under a statute with similar language, the Equal Credit Opportunity Act.

The case is on the Supreme Court’s calendar for argument on Dec. 4.

The case is Township of Mount Holly v. Mount Holly Gardens Citizens in Action, 11-1507.

Before it's here, it's on the Bloomberg Terminal.