The Fair Housing Act bars only intentional discrimination, not all practices that have a disparate impact on racial minorities, a federal judge ruled in a victory for the financial services industry.

The Department of Housing and Urban Development overreached in crafting a rule that liability could be established under housing law based on practices that had a discriminatory effect, even if they weren't motivated by purposeful bias, U.S. District Judge Richard Leon in Washington said in a ruling today.

"This is yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction," Leon wrote.

The Supreme Court is poised to take up a similar case with the question of whether people may sue by showing a "disparate impact" on racial minorities, or whether they must meet a higher standard by proving intentional bias, Leon said.

The case is American Insurance Association v. HUD, 13- cv-966, U.S. District Court, District of Columbia, (Washington).

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