More than three years after a Supreme Court ruling validated "disparate impact" as a legal argument in fair-lending cases, the banking industry and housing advocacy groups are still at odds over how to interpret the decision.

The ruling supported disparate impact — which holds lenders liable for discrimination even if it was unintended — under the Fair Housing Act. But it also suggested a higher legal bar for plaintiffs to make their case.

The case, known as Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, is playing a central role in the Department of Housing and Urban Development's plan to change its disparate impact rule.

In recent comment letters, including one from the American Bankers Association which WBA has signed on to, banking industry representatives are calling on HUD to realign its rule with the 2015 court ruling in order to end frivolous lawsuits. On the other side, advocacy groups argue the court decision endorsed HUD's current framework.

Read more in American Banker.