[Federal Register Volume 89, Number 65 (Wednesday, April 3, 2024)]
[Rules and Regulations]
[Pages 22934-22942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06977]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 115 and 125

[Docket No. FR-6355-F-02]
RIN 2529-AB07


Expanding the Fair Housing Testing Pool for FHIP and FHAP Funded 
Entities

AGENCY: Office of Fair Housing and Equal Opportunity, HUD.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Through this final rule, HUD eliminates the restrictions for 
Fair Housing Initiatives Program (FHIP) grantees and for Fair Housing 
Assistance Program (FHAP) agencies that currently bar FHIP and FHAP 
funded entities from using HUD funds to deploy fair housing testers 
with prior felony convictions or convictions of crimes involving fraud 
or perjury. The final rule ensures that FHIP and FHAP funded entities 
are able to fully investigate criminal background screening policies 
that are potentially discriminatory under federal civil rights laws by 
using a diverse group of testers with actual criminal convictions. This 
final rule also improves inclusivity in HUD programs for people with 
criminal convictions, consistent with President Joseph R. Biden's March 
31, 2022 Proclamation on Second Chance Month and Secretary Marcia 
Fudge's April 12, 2022 Memorandum, ``Eliminating Barriers That May 
Unnecessarily Prevent Individuals with Criminal Histories from 
Participating in HUD Programs,'' and is based on a HUD determination 
that no valid interest is served by categorically barring FHIP and FHAP 
funded entities from using testers with such convictions.

DATES: Effective date: This final rule is effective May 3, 2024.

FOR FURTHER INFORMATION CONTACT: Aztec Jacobs, Director, Office of 
Programs, Office of Fair Housing and Equal Opportunity, Department of 
Housing and Urban Development, 451 7th Street SW, Room 5250, 
Washington, DC 20410-8000, telephone number 202-402-7861 (this is not a 
toll-free number). HUD welcomes and is prepared to receive calls from 
individuals who are deaf or hard of hearing, as well as individuals 
with speech or communication disabilities. To learn more about how to 
make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

    Title VIII of the Civil Rights Act of 1968, as amended (Fair 
Housing Act or Act), prohibits discrimination in the sale, rental, or 
financing of dwellings and in other housing-related activities because 
of race, color, religion, sex (including sexual orientation and gender 
identity), disability, familial status, or national origin.\1\ Section 
817 of the Fair Housing Act provides that the Secretary may reimburse 
State and local fair housing enforcement agencies that assist the 
Secretary in enforcing the Act.\2\
---------------------------------------------------------------------------

    \1\ 42 U.S.C. 3601-3619, 3631.
    \2\ 42 U.S.C. 3616.
---------------------------------------------------------------------------

    Although Section 817 was part of the original 1968 Act, it was not 
until 1980, through an annual appropriations act (Pub. L. 96-103), that 
Congress

[[Page 22935]]

authorized funding for it, establishing the Fair Housing Assistance 
Program (FHAP). In requesting funding for the FHAP, the Carter 
administration cited limitations that localities had in processing fair 
housing complaints.\3\
---------------------------------------------------------------------------

    \3\ See The Fair Housing Act: HUD Oversight, Programs, and 
Activities, Congressional Research Service R44557 (April 7, 2021) 
and U.S. Department of Housing and Urban Development, FY1980 Budget 
Justifications, p. Q-2 and Pub. L. 96-103) available at sgp.fas.org/crs/misc/R44557.pdf.
---------------------------------------------------------------------------

    While the FHAP funds State and local governmental agencies to 
assist in enforcement of the Fair Housing Act, the Fair Housing 
Initiative Program (FHIP) was established in 1987 to fund private non-
profits to do the same. Section 561 of the Housing and Community 
Development Act of 1987 (Section 561) established the FHIP as a 
temporary program, which Congress made permanent in 1992 through the 
Housing and Community Development Act of 1992.\4\ In combination, the 
FHAP and FHIP strengthen HUD's enforcement of the Fair Housing Act and 
further fair housing.
---------------------------------------------------------------------------

    \4\ Public Law 102-550, October 28, 1992, 106 Stat. 3672.
---------------------------------------------------------------------------

    Among other things, the FHAP and FHIP fund testing activities 
designed to enhance enforcement of the Fair Housing Act. Testing refers 
to the use of an individual or individuals who, without a bona fide 
intent to rent or purchase a house, apartment, or other dwelling, pose 
as a prospective renter or purchaser for the purpose of gathering 
information that may indicate whether a housing provider is complying 
with fair housing laws. Both FHIP and FHAP funded entities can use 
testing as a tool to investigate potential violations of the Fair 
Housing Act.
    Section 561 specifically required HUD, during the demonstration 
period for the FHIP, to ``establish guidelines for testing activities 
funded under the private enforcement initiative of the fair housing 
initiatives program'' and noted that the purpose of the guidelines was 
``to ensure that investigations in support of fair housing enforcement 
efforts [. . .] shall develop credible and objective evidence of 
discriminatory housing practices.'' \5\ The Housing and Community 
Development Act of 1992 eliminated testing guidelines as a permanent 
requirement for the FHIP.\6\
---------------------------------------------------------------------------

    \5\ Public Law 100-242, February 5, 1988, 101 Stat. 1943.
    \6\ As explained in the 1994 proposed rule, ``the passage of 
section 905 establishes FHIP as a permanent program, and with the 
expiration of the demonstration period, the requirement for testing 
guidelines is removed.'' 59 FR 44596 (Aug. 29, 1994).
---------------------------------------------------------------------------

Current Regulatory Landscape

    HUD regulations currently forbid FHIP and FHAP funded entities from 
using federal funds for fair housing testing that involves testers with 
prior felony convictions or convictions of crimes involving fraud or 
perjury.\7\
---------------------------------------------------------------------------

    \7\ 24 CFR 125.107(a); 24 CFR 115.311(b).
---------------------------------------------------------------------------

    For FHIP funded entities, this restriction dates back to the 1988 
proposed regulations for the demonstration period that, among many 
other requirements, prohibited testers under the FHIP from having 
``prior felony convictions or convictions of crimes involving fraud or 
perjury.'' \8\ HUD did not explicitly explain why it proposed this 
specific restriction, nor did HUD receive comments related to this 
specific restriction. The regulations for the demonstration period were 
finalized in 1989 at 24 CFR part 125, and contained a section titled 
``Guidelines for private enforcement testing'' (previously codified at 
Sec.  125.405). The guidelines contained numerous prescriptive 
requirements about how eligible testing was to be designed and 
conducted (e.g., allowing testing only in response to a ``bona fide 
allegation''), including the requirement for a ``formal recruitment 
process designed to obtain a pool of credible and objective persons to 
serve as testers,'' followed by a restriction on testers having felony 
convictions or convictions of crimes involving fraud or perjury.\9\
---------------------------------------------------------------------------

    \8\ 53 FR 25581.
    \9\ 54 FR 6492, 6501.
---------------------------------------------------------------------------

    In 1994, HUD proposed eliminating the testing guidelines, noting 
that Congress specifically limited the testing guidelines requirement 
to the demonstration period and did not include this requirement in its 
permanent authorization of the FHIP. However, HUD proposed keeping the 
restriction on hiring testers with ``prior felony convictions or 
convictions of crimes involving fraud or perjury'' and keeping a 
requirement that testers receive training or be experienced in testing 
procedures and techniques.\10\ HUD did not provide an explanation for 
why it chose to retain the restriction regarding convictions in the 
proposed rule, nor in the 1995 final rule.\11\ The language--``The 
following requirements apply to testing activities funded under the 
FHIP: Testers must not have prior felony convictions or convictions of 
crimes involving fraud or perjury''--has not changed since 1995.\12\
---------------------------------------------------------------------------

    \10\ 59 FR 44596, 44604.
    \11\ 60 FR 58452, 58453.
    \12\ 60 FR 58452, 58453.
---------------------------------------------------------------------------

    HUD did not address the criminal backgrounds of FHAP testers in its 
regulations until 2005.\13\ While HUD established the eligibility 
criteria for participants in the FHAP in a 1980 interim rule and issued 
subsequent rules for the FHAP in 1982, 1988, and 1989, none of these 
addressed fair housing testing in any way.\14\ The proposed rule in 
2005 proposed a tester conviction restriction identical to that 
contained in the FHIP regulations. As with the FHIP rulemaking, there 
were no public comments on this restriction, and it was codified in 
2007 in a final rule.\15\
---------------------------------------------------------------------------

    \13\ See 45 FR 31880 (May 14, 1980); 47 FR 8991 (March 3, 1982); 
53 FR 34668 (Sept. 7, 1988); 54 FR 20094 (May 9, 1989); 61 FR 7674 
(Feb. 28, 1996); 61 FR 41282 (Aug. 7, 1996) (containing no 
conviction restrictions on testers) compare to 70 FR 28748 (May 18, 
2005) (containing the conviction restrictions on testers at issue in 
this final rule).
    \14\ 45 FR 31880; 47 FR 8991; 53 FR 34668; 54 FR 20094.
    \15\ 72 FR 19070 (Apr. 16, 2007), currently codified at 24 CFR 
115.311(b).
---------------------------------------------------------------------------

The Proposed Rule

    On October 31, 2023, HUD issued a Notice of Proposed Rulemaking, 
which proposed to amend its regulations by eliminating the tester 
restrictions that restrict FHIP and FHAP funded entities from using 
fair housing testers with prior felony convictions or convictions of 
crimes involving fraud or perjury (the proposed rule).\16\ The proposed 
rule was a response to an April 12, 2022 directive from Secretary 
Marcia Fudge to HUD to ``review our programs and put forth changes that 
ensure that our funding recipients are as inclusive as possible of 
individuals with criminal histories.'' \17\
---------------------------------------------------------------------------

    \16\ 88 FR 74381.
    \17\ ``Eliminating Barriers That May Unnecessarily Prevent 
Individuals with Criminal Histories from Participating in HUD 
Programs'' available at https://www.hud.gov/sites/dfiles/Main/documents/Memo_on_Criminal_Records.pdf.
---------------------------------------------------------------------------

    In the proposed rule, HUD explained that it presumably first 
enacted the restrictions on testers' criminal convictions and then 
continued them in subsequent rulemakings because of the idea that 
certain criminal convictions would undermine a tester's credibility in 
testifying in court to what the tester witnessed under Rule 609 of the 
Federal Rules of Evidence (FRE), which provides that certain criminal 
convictions may be admitted to attack witness's ``character for 
truthfulness.'' \18\
---------------------------------------------------------------------------

    \18\ FRE 609(a). Also, twenty-four states have local rules of 
evidence with substantially similar provisions to FRE 609. 6 
Weinstein's Federal Evidence Article VI (2021).
---------------------------------------------------------------------------

    However, HUD explained that it viewed a categorical bar on anyone 
with a felony conviction, or conviction involving fraud or perjury to 
be

[[Page 22936]]

overbroad, outdated, and unnecessary. First, such a broad and 
categorical bar includes a broader range of convictions than does FRE 
609. Second, even for those convictions covered by FRE 609, HUD saw no 
reason to categorically bar those who conduct testing using FHIP or 
FHAP funds from employing testers with such convictions. Those entities 
may reasonably conclude that the prospect of admissibility under FRE 
609 in litigation is of little consequence, especially because audio 
and video recording is often used in testing, which means that the 
recordings--more than the testers' testimony--are often the most 
important evidence. HUD pointed out that FRE 609 itself is not always 
applied even where a conviction comes under its potential application. 
Further, other requirements in these regulations will continue to apply 
to testers to help ensure that testers are objective, credible, and 
well qualified, regardless of their criminal backgrounds. For example, 
testers still must be trained in testing procedures and techniques.\19\ 
Testers cannot have an economic interest in the outcome of the test; 
\20\ be a relative or acquaintance of any party in the case; \21\ have 
had a recent employment history or other affiliation with the person or 
organization to be tested; \22\ or be a competitor (or licensed 
competitor) of the person or organization to be tested.\23\
---------------------------------------------------------------------------

    \19\ 24 CFR 115.311(c); 24 CFR 125.107(b).
    \20\ 24 CFR 115.311(d)(1); 24 CFR 125.107(c)(1).
    \21\ 24 CFR 115.311(d)(2); 24 CFR 125.107(c)(2).
    \22\ 24 CFR 115.311(d)(3) (prohibiting any such affiliation 
within five years of the testing); 24 CFR 125.107(c)(3) (prohibiting 
any such affiliation within one year of the testing).
    \23\ 24 CFR 115.311(d)(4); 24 CFR 125.107(c)(4) (specifying such 
``licensed'' competitors are barred from conducting testing).
---------------------------------------------------------------------------

    HUD also noted that it had been contacted by fair housing 
organizations urging reform of conviction restrictions because they 
prevent fair housing centers from testing for certain types of criminal 
background-based discrimination by preventing them from employing 
testers with felonies to test the entire application process. HUD 
recognized that many FHIP and FHAP funded entities now have an 
affirmative need to hire testers with criminal histories, who in cases 
that are of great priority to HUD may actually be better positioned to 
help those entities uncover discrimination. HUD explained that when the 
restrictions on testers' criminal convictions were first promulgated as 
a demonstration regulation in 1989, landlords were unlikely to conduct 
criminal background checks on prospective applicants.\24\ Since then, 
landlords have increasingly implemented policies and practices to 
screen applicants based on their criminal convictions.\25\
---------------------------------------------------------------------------

    \24\ See David Thatcher, Law & Social Inquiry Volume 33, Issue 
1, 12, Winter 2008 (explaining the upward trend since the 1990s in 
criminal background checks, including that no ``how to'' landlord 
books reviewed in a literature review prior to 1990 suggested 
conducting criminal background checks on tenants whereas all ``how 
to'' books suggested such checks as of the article's publication in 
2008).
    \25\ See, e.g., id. at 12 (describing a 2005 survey of large 
landlords which revealed that 80 percent screened prospective 
tenants for criminal histories).
---------------------------------------------------------------------------

    In 2016, HUD issued a memo explaining how these admissions policies 
and practices may be discriminatory under the Fair Housing Act.\26\ One 
way landlords may discriminate is by using a criminal records policy as 
a cover (or pretext) for intentional discrimination because of a 
protected class. For example, a landlord may tell Black applicants that 
they are being rejected because of their criminal record but accept 
white applicants with the same or similar record. The real reason for 
the rejection is the person's race, even though the landlord is saying 
the reason is the person's criminal record. Another example of how a 
landlord may violate the Fair Housing Act is if a landlord has a 
criminal records policy that disproportionately excludes people of a 
certain protected class, and that policy is not necessary to achieve a 
substantial, legitimate, nondiscriminatory interest, or if there is a 
less discriminatory policy that can achieve that interest.\27\ Testers 
with actual criminal records ranging from misdemeanor to felony 
convictions are in certain circumstances the best suited to obtain 
evidence of what modern-day criminal record screening practices are and 
whether these policies are being applied in a discriminatory way 
because of a protected characteristic. HUD explained how testers 
without bona fide criminal records are limited to investigating 
discrimination that occurs pre-application. Only testers with real 
criminal records will be able to submit an application to obtain 
evidence of what the policy is in practice at the admission stage and 
whether the policy is being applied (after the application is 
submitted) in a discriminatory manner.\28\
---------------------------------------------------------------------------

    \26\ See Office of General Counsel Guidance on Application of 
Fair Housing Act Standards to the Use of Criminal Records by 
Providers of Housing and Real Estate-Related Transactions (April 4, 
2016) (``While having a criminal record is not a protected 
characteristic under the Fair Housing Act, criminal history-based 
restrictions on housing opportunities violate the Act if, without 
justification, their burden falls more often on renters or other 
housing market participants of one race or national origin over 
another (i.e., discriminatory effects liability). Additionally, 
intentional discrimination in violation of the Act occurs if a 
housing provider treats individuals with comparable criminal history 
differently because of their race, national origin or other 
protected characteristic (i.e., disparate treatment liability).'')
    \27\ See id. (explaining that achieving resident safety and/or 
protecting property may be substantial and legitimate interests, 
assuming they are the actual reasons for the policy, but that a 
housing provider must be able to prove through reliable evidence 
that its policy or practice of making housing decisions based on 
criminal history actually assists in protecting resident safety and/
or property).
    \28\ See, e.g., Implementation of the Office of General 
Counsel's Guidance on Application of Fair Housing Act Standards to 
the Use of Criminal Records by Providers of Housing and Real Estate-
Related Transactions (June 10, 2022) Memorandum directed to FHIP and 
FHAP funded entities, highlighting the different ways in which 
criminal records policies may violate the Act, and explaining that a 
landlord may have a policy in writing that differs from a policy in 
practice, and that fully ``[i]dentify[ing] all policies, including 
written and unwritten policies or practices'' is an important first 
step in investigating the potential discriminatory effects of a 
policy) available at https://www.hud.gov/sites/dfiles/FHEO/documents/Implementation%20of%20OGC%20Guidance%20on%20Application%20of%20FHA%20Standards%20to%20the%20Use%20of%20Criminal%20Records%20-%20June%2010%202022.pdf. Without having testers that go through the 
entire application process, it is difficult to find out whether 
there is a difference between what a tester is told the policy is 
and what the policy is in practice.
---------------------------------------------------------------------------

    Finally, HUD pointed out that HUD's current regulation 
disproportionately excludes people of color from opportunities to work 
for FHIP and FHAP funded entities, even as it serves questionable value 
in ensuring credible evidence in view of the other safeguards that 
apply to fair housing testing.

This Final Rule

    After reviewing and considering public comments on this Rule, HUD 
finalizes its proposal to remove the conviction restrictions for 
testers in the FHIP and FHAP regulations.
    HUD notes that in addition to the reasons expressed in the proposed 
rule, summarized above, and echoed by many public comments summarized 
below, HUD received several public comments from local fair housing 
organizations regarding the difficulties they have had due to the 
conviction restrictions recruiting testers of color to conduct race and 
national origin-based testing. Further, commenters highlighted the 
catch-22 organizations are put in regarding compliance with these HUD 
restrictions and compliance with anti-discrimination employment 
restrictions and/or civil-rights based values. Finally, several 
commenters noted that removing this restriction is necessary for HUD to 
be consistent in terms of its own commitment to equity and civil 
rights. HUD believes these are important

[[Page 22937]]

additional reasons to finalize the proposed rule and to remove the 
restrictions on testers with felony convictions and convictions 
involving fraud and perjury.

II. Public Comments and HUD's Response to Public Comments

    HUD received 192 comments from FHIP and FHAP funded entities, 
advocacy and re-entry organizations, appraisers, testers, persons with 
criminal convictions, and other individuals. This public comments 
section includes a summary of the public comments that HUD received in 
response to the proposed rule.

A. General Support for the Proposed Rule

    Several commenters expressed their general support for HUD's 
proposal to eliminate the agency's restrictions on the use of fair 
housing testers with prior felony convictions or certain other 
convictions by FHIP and FHAP funded entities. Commenters writing in 
support of the rule emphasized the value of or necessity for testing, 
generally. One commenter said that ``testers play a vital role and 
necessity in assisting to eradicate housing discrimination in 
America.''
Comments Criticizing the Current Regulation
    Some commenters noted that HUD's current restrictions are 
``antiquated'' and ``outdated.'' One of these commenters also described 
the current restrictions as ``overbroad'' and ``unnecessary.'' Another 
questioned their policy justification. Two commenters said the current 
restrictions never should have been on the books in the first place.
    Some commenters said the current restrictions amount to a 
discriminatory ``blanket ban'' on persons with criminal histories.
    Other commenters said the current restrictions constitute 
employment discrimination. Some commenters noted that the restrictions 
are inconsistent with Equal Employment Opportunity Commission guidance 
on the use of criminal records in employment decisions. One commenter 
said complying with the current regulation causes them to face 
potential liability for employment discrimination. One commenter noted 
that the proposed changes would also allow FHIP and FHAP funded 
entities to abide by state and local laws which prohibit employment 
discrimination based on criminal legal system interaction.
    One commenter said the current regulation is inconsistently applied 
and frequently misunderstood with some grant technical monitors 
enforcing the regulation while others do not, and several FHIP staff 
across the country have misunderstood the regulation to only bar 
testers with felonies related to fraud or perjury.
Consistent Anti-Discrimination Message From HUD
    Commenters said the proposed rule would make it easier for housing 
organizations to uncover housing discrimination, and therefore further 
the current Administration's goal of advancing core values of equity, 
civil rights, racial justice, and equal opportunity.
    Several commenters said that there is a contradiction between HUD 
forbidding housing providers from discriminating against tenants on the 
one hand, but on the other hand engaging in discrimination by forcing 
FHIP and FHAP funded entities to discriminate in employment. One 
commenter said HUD's ``blanket ban'' on testers with criminal 
convictions negates HUD's stated commitment to breaking down barriers 
for criminal justice system involved persons. One commenter said the 
existing regulation tells justice-impacted communities that fair 
housing organizations are ``hypocrites'' for indulging in the very 
discrimination those organizations work to combat. One commenter said 
it is hypocritical to test for discrimination on the basis of criminal 
record while barring those who have served their sentences from 
testing. Another commenter said revoking the current restrictions would 
meaningfully aid in HUD's commitment to make reentry into the workforce 
more accessible for persons with a prior felony conviction. This 
commenter cited prior HUD statements that align with the proposed rule, 
which note that criminal history is not a good predictor of housing 
success, and that denying housing to prospective tenants could violate 
the Fair Housing Act. Some commenters said eliminating the current 
restrictions would reinforce rather than contradict HUD's own guidance. 
These commenters said the proposed rule was essential to ensure a 
consistent anti-discrimination message from HUD and its grantees.
Advancing Equity
    Several commenters supported the proposed rule, noting that it 
aligns with their organizational missions. Commenters supported the 
proposed rule because it would help to make HUD programs more fair and 
inclusive.
    Commenters indicated specific populations that this rule would 
help, including those who are being discriminated against by housing 
authorities and employers, domestic violence survivors, people with 
disabilities who have felony convictions, and those needing a place to 
live. One commenter said the proposed rule takes a step to deter the 
criminal justice system's oppression and discrimination against people 
of color.
    Several commenters said employment-based criminal history 
restrictions discriminate against Black people and minorities. Other 
commenters also pointed out that the current regulation 
disproportionately affects certain groups which have been unfairly 
impacted by mass incarceration and biases in the criminal justice 
system, including Black and Latino individuals and other racial 
minorities, and these people are the exact demographic of people who 
are needed to be fair housing testers. Some of these commenters said 
that excluding individuals with convictions from serving as fair 
housing testers undermines efforts to address the inequalities in 
housing by perpetuating inequalities in employment- a double negative 
impact. One commenter noted that the proposed changes are a step 
towards rectifying centuries of policies and practices that have 
created worse housing and employment outcomes for underserved groups.
    HUD Response: HUD thanks these commenters for their comments and 
notes that this final rule mirrors the proposed rule.

B. General Opposition to the Proposed Rule

    Commenters opposing the proposed rule cited various potential 
disadvantages as outweighing values such as inclusion, equity, or anti-
racism. One commenter said those values are not worth making testing 
worse, and potentially dangerous.
    Some commenters opposed the proposed rule, expressing disapproval 
of fair housing testing in appraisal transactions. One commenter said 
that national rules outlined in USPAP (the Uniform Standards of 
Professional Appraisal Practice) already forbid appraisers from 
utilizing any kind of bias when preparing a report or opinion of value. 
Another commenter said that ``[i]f a property is accurately evaluated, 
it is a non-biased issue. The property speaks for itself'' and noted 
that those controlling testing are not knowledgeable about the 
appraisal process.
    One commenter expressed disapproval of the proposed rule , stating 
that HUD Secretary Marcia

[[Page 22938]]

Fudge has ``commented publicly and on the record with her own racial 
bias without substantiating evidence or proof.'' Another commenter said 
the proposed rule was an ``egregious idea,'' and that HUD should 
instead be promoting safe and affordable housing.
    One commenter noted that ``there are plenty of people who do not 
have criminal records that are from diverse populations and socio-
economic backgrounds that can assist with this job.''
    Another commenter said the proposed rule hides information from the 
screening decision process, and that if an applicant has prior felony 
convictions or convictions of crimes involving fraud or perjury, then 
it should be known.
    HUD Response: HUD thanks the commenters for their comments.
    HUD respectfully disagrees that there are enough candidates of 
diverse backgrounds to fill the job of testers. HUD notes that it 
received several comments from organizations that conduct fair housing 
testing that say that they find it either difficult or impossible to 
recruit a diverse set of fair housing testers under the current 
regulation. Based on those comments, this problem seems to be 
particularly heightened in rural communities. Commenters also note that 
persons with criminal convictions are needed to effectively test for 
certain kinds of discrimination (i.e., using criminal convictions as a 
pretext for discrimination based on race), because only these people 
can complete the application process to effectively uncover this kind 
of discrimination.
    HUD notes that this rulemaking does not hide any information from 
the tester screening process. Instead, the final rule permits FHIP and 
FHAP funded entities who hire testers to screen for felony convictions 
or crimes involving fraud or perjury and allows them to have discretion 
to reject such applicants based on such convictions.
    HUD disagrees with the commenter that this rule could make testing 
potentially dangerous. HUD also believes this rule supports access to 
safe and affordable housing free from discrimination.
    HUD notes that this rule is not related to the necessity of testing 
generally or in any particular industry such as the appraisal industry. 
It also does not change who controls testing or their knowledge of the 
appraisal process. Under this rule, testing remains an available option 
for FHIP and FHAP funded entities to utilize to enforce the Fair 
Housing Act in all covered housing transactions. This rule only changes 
who can qualify as a tester funded through FHIP and FHAP funds. HUD 
further notes that the fact that appraisers are legally prohibited from 
discriminating does not mean that they actually refrain from 
discriminating under the Fair Housing Act. Therefore, testing is still 
a potentially relevant tool.

C. Potential Impacts on Fair Housing Testing

Negative Impacts
    Two commenters said the proposed rule may make the testing process 
unsafe. One commenter cited general recidivism statistics, while others 
suggested that those who have broken the law or committed a felony in 
the past are untrustworthy or more likely to break the law again. One 
of these commenters cited a 75% recidivism rate over five years from 
the Bureau of Justice Statistics to oppose the rule's inclusion 
specifically of crimes of fraud and perjury.
    One commenter noted that a person who has knowingly broken a major 
law in the past may then be put in the position as a tester where they 
can lie for financial gain. Another commenter suggested that testers 
with criminal backgrounds may take a bribe from a housing provider so 
that the provider would ``pass'' the fair housing test. Another 
suggested that those who have committed felonies are more likely to 
commit criminal acts like blackmail against landlords.
    One commenter noted that although past felony convictions in 
general may not have any bearing on the integrity of the FHIP and FHAP 
programs, proven past behavior of fraud and perjury should. The same 
commenter noted that allowing testers with fraud or perjury convictions 
would impact the integrity of the program, and that such a rule would 
be akin to, or lead to a slippery slope of, allowing contractors and 
others on the debarment list to participate in future endeavors.
Positive Impacts
    Some commenters stated that people with criminal histories are just 
as capable as those without criminal histories. One of these commenters 
said that justice involved individuals can be trustworthy, effective 
communicators, reliable, and brilliant. Several commenters dismissed 
concerns about the lack of credibility that may be attributed to a 
person with certain criminal convictions, noting that because most fair 
housing tests are now recorded, there is less concern that someone--
including someone with a criminal conviction--is fabricating a 
narrative. One commenter said there are more reliable indicators of an 
individual tester's credibility than a prior criminal conviction. 
Another commenter said that a criminal conviction has no bearing on a 
person's credibility or potential as a tester. Commenters said the 
other restrictions on testers, including barring them from having an 
economic interest in tests and other anti-bias restrictions, are 
sufficient to demonstrate tester credibility. One commenter pointed out 
that while some citizens may be guilty of fraud, it is not always a 
direct result of their character; instead, barriers related to poverty 
cause survival behaviors that can lead to conviction. Another commenter 
similarly stated that there are countless reasons why someone may be 
incarcerated, many of which have no bearing on an individual's 
character. One person commented that not all those convicted of 
felonies are ``true criminals,'' noting they know someone convicted of 
a felony. Other commenters argued that tester applicants deserve an 
individualized assessment, even if they have a criminal background. One 
commenter said the vast majority of fair housing testers never testify 
at trial at all, nor is eliciting trial testimony a primary purpose of 
testing. The commenter stated that even when cases do go to litigation, 
only a very small percentage go to trial and a smaller percentage still 
involve the testimony of a tester.
    Commenters pointed out that in some ways, people with criminal 
convictions bring unique advantages to the role of fair housing tester 
or otherwise would make more effective housing equity enforcement. 
Commenters said it is important that people with conviction histories 
have the chance to work as federally funded fair housing testers 
because they are closest to the issue and have lived experiences that 
can benefit investigations. One commenter noted that a job as a tester 
is perfect for an individual with a felony, explaining that they would 
have true interest and passion in this role.
    One commenter said the proposed rule would ensure that testing 
efforts are rooted in the community which promotes transparency and 
trust and encourage the participation of individuals who may have a 
personal stake in addressing housing discrimination, thereby 
strengthening the overall impact of FHIP and FHAP funded initiatives. 
Another commenter said allowing local FHIP and FHAP funded entities the 
discretion to determine tester qualifications can also lead to 
increased community engagement by involving community

[[Page 22939]]

members, advocates, and local experts in the testing process that will 
foster a sense of ownership and collaboration.
    Many commenters said the proposed rule would ensure that FHIP and 
FHAP funded entities are able to fully investigate criminal background 
screening policies that are potentially discriminatory under federal 
civil rights laws by using testers with actual criminal backgrounds. 
Commenters explained that testers with backgrounds are necessary to 
complete effective testing throughout a housing transaction, including 
during the application phase. Commenters said this is especially 
important because as more sophisticated landlords have learned about 
the ways that blanket bans against people with convictions may violate 
the Fair Housing Act, they have become less likely to openly admit 
discriminatory policies pre-application. One commenter said it needs to 
use testers with criminal histories to successfully litigate these 
types of fair housing cases ``given [their] hostile court system.'' 
Several commenters said removing these restrictions would make it 
possible to fully investigate and enforce local and state laws that 
limit tenant screening based on criminal histories of applicants.
    Several commenters said the current regulation needlessly limits 
the pool of potential fair housing testers who are members of racial 
minorities, when the very thing that is needed to adequately test for 
fair housing is a wide variety of people who are members of racial 
minorities. Other commenters said broadening the scope of persons who 
can serve as testers--as the proposed rule would do-- creates a more 
diverse and more effective testing pool. One commenter explained that 
their organization gets many complaints about housing discrimination, 
and one of the most difficult parts of trying to get justice for their 
clients is finding testers to do the work. This commenter wrote that 
allowing formerly incarcerated people to work as fair housing testers 
might go a long way to increasing the number of available testers in 
their area. Another commenter stated that due to racial disparities in 
the local criminal justice system, they have had challenges in 
recruiting racially diverse testers, especially Native American 
testers. The commenter stated that this impedes their ability to assist 
their Native American clients who face housing discrimination. The 
commenter explained the current restrictions also restrict their 
ability to use Black testers, and explained how the current regulation 
is especially harmful to anti-discrimination efforts in rural states by 
needlessly limiting the pool of testers. Another organization commented 
that the current restrictions on working with testers with criminal 
backgrounds has presented obstacles in recruiting effective testers 
that have prevented their agency from hiring individuals with criminal 
convictions who would be excellent testers. One commenter said removing 
barriers to entering the tester workforce can help meet the urgency of 
the ongoing and evolving need to enforce fair housing.
    Commenters said FHIP and FHAP funded entities should decide whether 
to hire a tester with a conviction record, as they are most equipped to 
know and be able to weigh the risk that a tester's past involvement in 
the criminal legal system poses in relation to the methods used in 
testing. One commenter noted that the proposed rule would not require 
FHIP and FHAP funded entities to hire testers with criminal 
convictions, it would just give them that discretion. Another commenter 
stated that FHIP and FHAP funded entities should have sufficient 
latitude to identify and select testers that meet minimum training 
standards and support their work without undue interference, 
restrictions, and burdensome requirements.
    HUD Response: HUD appreciates the comments related to the impacts 
of the rule on the quality of fair housing tests and the integrity of 
the FHIP and FHAP. HUD has considered how this rule may impact fair 
housing testing negatively and how this rule may impact fair housing 
testing positively and believes that the positive impacts will outweigh 
any potential negative impacts.
    HUD believes that FHIP and FHAP funded entities, who are 
responsible for the conduct of their testers, are well positioned to 
decide whether there is a risk in employing an applicant with a 
particular criminal conviction as a tester. This rule leaves them free 
to make the same kind of discretionary determination, based on the 
totality of the circumstances (including how long ago the conviction 
was, the circumstances surrounding the conviction, and life someone has 
lived since) that employers, landlords, and others are free to--and 
often--make. Far from posing a risk to public safety, providing 
opportunities to those with criminal convictions to be employed as fair 
housing testers opens up meaningful employment opportunities, and may 
actually reduce the risk of recidivism among ex-offenders, increasing 
public safety overall.\29\
---------------------------------------------------------------------------

    \29\ See, e.g, Matthew Makarios, Benjamin Steiner, Lawrence F. 
Travis III. (2010). ``Examining the Predictors of Recidivism among 
Men and Women Released from Prison in Ohio'', Criminal Justice and 
Behavior. 37(12): 1377-1391 (finding that ``offenders who maintained 
stable employment throughout their first year of parole [were] 
significantly less likely to recidivate than those that did not hold 
a job at all''); Michele Staton, Megan F. Dickson, Martha Tillson, 
J. Matthew Webster, Carl Leukefeld. (2019). ``Staying Out: Reentry 
Protective Factors Among Rural Women Offenders'', Women & Criminal 
Justice. 29(6) (following a group of women who exited county jails 
to rural Appalachian communities for 12 months, concluding that 
having at least part-time employment was one of many ``protective 
factors'' associated with staying out of jail); Stephen J. Tripodi, 
Johnny S. Kim, Kimberly Bender. (2010). ``Is employment associated 
with reduced recidivism? The complex relationship between employment 
and crime'' International Journal of Offender Therapy and 
Comparative Criminology, 54(5): 706-720 (overviewing research that 
``most criminological research indicates a strong inverse 
relationship between employment and crime, suggesting that ex-
prisoners who obtain employment are at significantly reduced risk 
for reoffending'' and finding, based on following a group of male 
parolees released from Texas prisons, a significant association 
between employment and increased time until reincarceration); Robert 
Apel, Julie Horney. (2017). ``How and why does work matter? 
Employment conditions, routine activities, and crime among adult 
male offenders'', Criminology, 55 (2): 307-343 (finding that having 
a job that a person is ``very committed to'' verses a job that was 
``just a job'' significantly lowers crime risk).
---------------------------------------------------------------------------

    HUD disagrees with commenters that individuals with felony and 
convictions involving fraud or perjury should be barred to serve as 
testers because they are more likely to accept bribes, blackmail 
landlords, or lie for financial gain. HUD believes that the local FHIP 
or FHAP funded entity--rather than HUD--is in the best position to know 
the extent to which applicants with certain convictions may jeopardize 
testing and the extent to which local judges and juries may find 
particular convictions relevant to witness credibility. Those entities 
can use this local expertise, along with weighing the particulars of 
the conviction, such as the time that has passed since the conviction, 
the nature of the conviction, and evidence of post-conviction reform, 
in making their own local hiring decisions.
    Secondly, as HUD explained in the preamble to the proposed rule, 
under modern day testing methodologies allowed in many states, a 
tester's main role on the witness stand is testifying that the 
recording being presented is an authentic recording of the event at 
issue in the case. Thus, in many cases, the tester merely needs to be 
credible enough for the judge or jury believe that testimony.
    In addition, HUD believes other requirements that are not impacted 
by this final rule help ensure that testers are objective, credible, 
and well qualified, regardless of their criminal convictions. For 
example, testers must

[[Page 22940]]

be trained in testing procedures and techniques and they are prohibited 
from having an economic interest in the outcome of the test, being a 
relative or acquaintance of any party in the case, having had a recent 
employment history or other affiliation with the person or organization 
to be tested, or being a competitor (or licensed competitor) of the 
person or organization to be tested. 24 CFR 125.107(c) and 115.311(d).
    HUD declines to retain restrictions on individuals with convictions 
involving fraud or perjury in this final rule. While this final rule 
allows FHIP and FHAP funded entities to use HUD funds to hire testers 
with convictions involving fraud or perjury (in addition to those with 
felony convictions generally), HUD expects many FHIP and FHAP funded 
entities will still screen for these convictions and consider whether 
to hire an applicant on a case-by-case basis, in line with their own 
needs, investigations, and litigation efforts. A FHIP or FHAP funded 
entity may, for example, view an applicant with a 40-year-old 
conviction for writing a bad check much differently than someone more 
recently convicted of embezzling funds from a non-profit or 
governmental organization. Whether for fraud or perjury crimes, or for 
felony convictions more generally, HUD finds that an automatic, blanket 
ban is unable to account for the numerous different circumstances which 
may make a particular conviction an inappropriate disqualifier to a 
testing applicant's candidacy for employment with a FHIP or FHAP funded 
agency. While HUD notes that recidivism statistics can have value in 
some contexts, the inferences that can be drawn from these statistics 
are limited, and HUD believes that these statistics are inappropriate 
to use here to justify categorical bans against people applying to be 
testers.\30\ HUD reiterates the messages in ``Tenant Screening With 
Criminal Background Checks: Predictions And Perceptions Are Not 
Causality'', published on May 17, 2022 by HUD's Office of Policy, 
Development, and Research, which notes that ``predicting future 
criminal involvement is a complicated business. Even using the best 
assessment and screening tools that undergo regular validations and 
enhancements, predictions are often wrong. . . . prediction is not 
causality, [and] we have to accept that predictions look backward to 
estimate an outcome that has not yet occurred and may never occur.'' 
Further, basing risk assessments on criminal convictions means using 
``measures that are inherently biased because of discriminatory 
criminal justice practices.'' Id. Thus, HUD believes that examining 
each applicant on a case on a case-by-case basis, with full contextual 
information, is a fairer and more effective means to determine 
someone's qualification for a job, compared to automatically assuming 
someone will not be a good candidate based on a conviction for a 
specific category of crime (here, either a felony or a crime involving 
fraud or perjury).
---------------------------------------------------------------------------

    \30\ First, it should be noted that recidivism rates in the BJS 
study that the commenter appears to be citing from are measured by 
arrest for any offense, including parole and probation violations, 
and include arrests that do not result in convictions. See U.S. 
Department of Justice Office of Justice Programs Bureau of Justice 
Statistics, Special Report ``Recidivism of Prisoners Released in 30 
States in 2005: Patterns from 2005 to 2010'' (April 2014), available 
at https://bjs.ojp.gov/content/pub/pdf/rprts05p0510.pdf. Of note, 
this report (and data tables accompanying it) shows that 11.9% of 
re-arrests within five years were for fraud offenses, and that the 
overall recidivism rate after 5 years was 55.4 percent if measured 
by any arrest resulting in a new conviction. Second, even where 
recidivism is measured in the same way, rates can vary widely 
depending on the study. See id. (detailing that of a cohort of state 
prisoners released in 2005, those convicted of fraud or forgery 
offenses had one of the highest recidivism rates (77 percent were 
re-arrested for any offense after five years)) compare to Kim Steven 
Hunt and Robert Dumville, U.S. Sentencing Commission, Recidivism 
Among Federal Offenders: A Comprehensive Overview 11 (2016), 
available at https://www.ussc.gov/sites/default/files/pdf/research-and-publications/research-publications/2016/recidivism_overview.pdf 
(detailing that of a cohort of federal prisoners released in 2015, 
those convicted of fraud had the lowest recidivism rates (34.2 
percent were re-arrested for any offense after eight years)).
---------------------------------------------------------------------------

    HUD believes that integrity of the FHIP and FHAP is jeopardized by: 
(1) imposing rigid and automatic bans based on convictions that may 
have no bearing on a person's ability to be a quality tester, (2) 
forbidding FHIP and FHAP funded entities from taking into account all 
the relevant information about candidates for testers (including the 
age of any conviction, evidence of rehabilitation, circumstances 
surrounding any conviction), and (3) forcing FHIP and FHAP funded 
entities to make decisions based on convictions that may have been the 
result of the same kind of discrimination that these entities are meant 
to combat. HUD believes that these issues pose more of a threat to the 
integrity of the FHIP and FHAP than allowing FHIP and FHAP funded 
entities the discretion to allow people with convictions for fraud and 
perjury become testers. HUD further notes that providing discretion to 
FHIP and FHAP funded entities to hire testers who have past convictions 
involving fraud or perjury is consistent with current debarment 
regulations, which allow federal agencies to debar individuals based on 
certain criminal convictions (see 2 CFR 180.800), and also allow the 
government to take into account a long list of mitigating circumstances 
to decide not to debar an individual based on such convictions. See 2 
CFR 180.860.
    HUD agrees with commenters who said testers with actual criminal 
convictions ranging from misdemeanor to felony convictions are, in 
certain circumstances, the best suited to obtain evidence of what 
modern-day criminal record screening practices are and whether these 
policies are being applied in a discriminatory way. HUD also agrees 
that engaging individuals with experiences that are relevant to a fair 
housing investigation is beneficial to both fair housing enforcement 
and HUD's mission to advance equity more generally. HUD agrees with 
commenters that broadening the scope of persons who can serve as 
testers allows FHIP and FHAP funded entities to build and maintain a 
more diverse testing pool that is best poised to respond to all types 
of fair housing allegations. The final rule is in line with these 
goals.
    HUD agrees that FHIP and FHAP funded entities are in the best 
position to make decisions about how to screen their own testers 
because those entities know the specific characteristics and challenges 
of their local housing markets and can select the most appropriate 
testers for their investigations. As stated in the proposed rule, HUD 
sees no reason to categorically bar those who conduct testing using 
FHIP or FHAP funds from employing testers with certain criminal 
convictions. By rescinding the Federal prohibitions on tester criminal 
convictions, this final rule provides necessary discretion to FHIP and 
FHAP funded entities.

D. Increased Opportunities and Benefits for People With Criminal 
Convictions and Society

    Commenters noted the struggles of individuals who have made 
mistakes, and noted that despite being rehabilitated, not a threat, and 
active members of their community, people with criminal convictions are 
continually unfairly excluded from desperately needed opportunities, 
including career opportunities some of which are blocked by the current 
regulation's stipulations. Commenters said the collateral consequences 
of felony convictions can lead to mental health issues and recidivism.
    Many commenters said that the current regulations unfairly punish 
those who have already been punished through the criminal justice 
system and should not be punished further.

[[Page 22941]]

Commenters said if someone has ``served their time'' and ``paid their 
debt to society,'' they should be able to put the past behind them and 
have a second chance, including the chance to assist in positive change 
and serve in the role of a fair housing tester.
    Commenters said the proposed rule will improve the lives of people 
with criminal convictions by expanding opportunities to develop 
marketable skills and jobs in order gain self-sufficiency, stability, 
and contribute positively to society. Commenters specifically talked 
about the value of those reentering society becoming more involved in 
their communities through serving in the role of a fair housing tester. 
Commenters stated that the proposed rule would reduce stigma against 
people with felony convictions, which commenters noted as an important 
goal.
    One commenter stated that this rule is especially needed to support 
single fathers and men, especially Black men who are struggling to 
regain their identity without stability or sources of income because of 
criminal records.
    HUD Response: HUD agrees with commenters that the final rule will 
expand important opportunities for individuals with criminal 
convictions because of the compensation these opportunities will 
provide for individuals who are hired through the FHIP and FHAP 
programs, the valuable experience these individuals will gain to help 
further career prospects, and because of the empowerment that comes 
from employment generally, and particularly employment focused on 
rooting out discrimination in one's community. HUD notes that opening 
access to fair housing enforcement should increase housing 
opportunities more generally by increasing detecting discriminatory 
policies and practices that impact those with criminal convictions.
    HUD agrees with the commenters that by opening up employment 
opportunities for people with criminal convictions in our FHIP and FHAP 
programs, this final rule contributes to a stronger, healthier, safer 
society at large.\31\
---------------------------------------------------------------------------

    \31\ While research has demonstrated that employment lowers 
recidivism risks generally, there is also evidence that meaningful 
jobs may be the most impactful. See, e.g., Robert Apel, Julie 
Horney. (2017). ``How and why does work matter? Employment 
conditions, routine activities, and crime among adult male 
offenders'', Criminology, 55 (2): 307-343 (finding that having a job 
that a person is ``very committed to'' verses a job that was ``just 
a job'' significantly lowers the risk that person will commit a 
crime).
---------------------------------------------------------------------------

E. Other

    One commenter requested that guidance be issued to clarify to grant 
managers and FHIP staff that a blanket ban on testers with past 
convictions will no longer be enforced. Another commenter said HUD 
should ensure that FHIP and FHAP funded testing programs are actively 
advertising to people with prior criminal convictions, encouraging 
people from all backgrounds to apply, and evaluating their applications 
fairly. One commenter recommended that once the prohibition is removed, 
HUD should partner with organizations that serve those with felony 
convictions and convictions involving fraud or perjury to create and 
fund a training program and pipeline for those with records to become 
testers.
    Several commenters wrote regarding their support for or their 
opposition to expanding housing opportunities for individuals with 
criminal convictions.
    Other commenters wrote with specific concerns and requests relating 
to their individual housing situations.
    HUD Response: HUD thanks commenters for their recommendations and 
will take them under advisement.
    HUD also appreciates all comments relating to expanding housing 
opportunities for individuals with criminal histories. However, this 
final rule does not change any regulation regarding whom landlords --
including HUD-assisted housing providers and public housing agencies--
may accept as tenants. Instead, this final rule removes prohibitions on 
the use of HUD funds to hire testers with certain criminal convictions.
    Finally, regarding comments outlining specific concerns and 
requests relating to individual housing situations, HUD thanks these 
commenters for their thoughts, however, HUD is unable to take any of 
the requested actions under this rulemaking.

III. Findings and Certifications

Regulatory Review--Executive Orders 12866, 13563, and 14094

    Under E.O. 12866 (Regulatory Planning and Review), a determination 
must be made whether a regulatory action is significant and, therefore, 
subject to review by the Office of Management and Budget (OMB) in 
accordance with the requirements of the order. E.O. 13563 (Improving 
Regulations and Regulatory Review) directs Executive agencies to 
analyze regulations that are ``outmoded, ineffective, insufficient, or 
excessively burdensome, and to modify, streamline, expand, or repeal 
them in accordance with what has been learned.'' E.O. 13563 also 
directs that, where relevant, feasible, and consistent with regulatory 
objectives, and to the extent permitted by law, agencies are to 
identify and consider regulatory approaches that reduce burdens and 
maintain flexibility and freedom of choice for the public. E.O. 14094 
(Modernizing Regulatory Review) amends section 3(f) of E.O. 12866, 
among other things.
    The final rule revises 24 CFR parts 115 and 125 to remove fair 
housing tester restrictions. The revised regulations would allow FHIP 
and FHAP funded entities the ability to use HUD funds to compensate 
testers with felony convictions and convictions for crimes involving 
fraud or perjury. This rule was not subject to OMB review. This rule is 
not a ``significant regulatory action'' as defined in section 3(f) of 
Executive Order 12866 and is not an economically significant regulatory 
action.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This final rule will remove tester restrictions from the FHIP and FHAP 
regulations which prohibit fair housing testers with prior convictions 
of a felony, fraud, or perjury. This will not create an undue burden on 
small entities, instead it will allow FHIP and FHAP funded entities the 
ability to use testers with felony convictions and convictions for 
crimes involving fraud or perjury. Identifying potential discriminatory 
screening policies will positively impact small entities and assist 
with maintaining compliance with the Fair Housing Act. Therefore, this 
final rule will not have a significant economic impact on a substantial 
number of small entities.

Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive order. This final rule does not have 
federalism implications and would not impose substantial direct 
compliance costs on state and local governments or preempt

[[Page 22942]]

state law within the meaning of the Executive order.

Environmental Impact

    This final rule is a policy document that sets out fair housing and 
nondiscrimination standards and provides for assistance in enforcing 
fair housing and nondiscrimination. Accordingly, under 24 CFR 
50.19(c)(3), this rule is categorically excluded from environmental 
review under the National Environmental Policy Act of 1969 (42 U.S.C. 
4321).

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 establishes 
requirements for Federal agencies to assess the effects of their 
regulatory actions on state, local, and tribal governments and the 
private sector. This rule will not impose any federal mandates on any 
state, local, or tribal governments or the private sector within the 
meaning of the Unfunded Mandates Reform Act of 1995.

List of Subjects

24 CFR Part 115

    Administrative practice and procedure, Aged, Fair housing, Grant 
programs--housing and community development, Individuals with 
disabilities, Intergovernmental relations, Mortgages, Reporting and 
recordkeeping requirements.

24 CFR Part 125

    Fair housing, Grant programs--housing and community development, 
Reporting and recordkeeping requirements.

    For the reasons described in the preamble, HUD amends 24 CFR 115 
and 125 as follows:

PART 115--CERTIFICATION AND FUNDING OF STATE AND LOCAL FAIR HOUSING 
ENFORCEMENT AGENCIES

0
1. The authority citation for part 115 continues to read as follows:

    Authority:  42 U.S.C. 3601-19; 42 U.S.C. 3535(d).


Sec.  115.311  [Amended]

0
2. In Sec.  115.311, remove paragraph (b) and redesignate paragraphs 
(c) and (d) as paragraphs (b) and (c), respectively.

PART 125--FAIR HOUSING INITIATIVES PROGRAM

0
3. The authority citation for part 125 continues to read as follows:

    Authority:  42 U.S.C. 3535(d), 3616 note.


Sec.  125.107  [Amended]

0
4. In Sec.  125.107, remove paragraph (a) and redesignate paragraphs 
(b) and (c) as paragraphs (a) and (b), respectively.

Damon Y. Smith,
General Counsel.
[FR Doc. 2024-06977 Filed 4-2-24; 8:45 am]
BILLING CODE 4210-67-P