The Department of Housing and Urban Development is a rare government agency that funds private enforcement of its own regulations. It does so via its Fair Housing Initiatives Program, which offers grants to nonprofits to carry out the work.
The National Fair Housing Alliance's claims that banks have failed to maintain homes in minority neighborhoods are based on shaky factual and legal ground. However, alliances between the nonprofit and its allies in government may leave bankers with little choice but to settle.
The National Fair Housing Alliance has accused big banks of discriminating against minorities in the upkeep of foreclosed properties and is seeking millions in settlements mostly for itself. Behind its demands are faulty data and grants overseen by a federal official with close ties to the group.