Treasury Issues Final Rule to Enforce Title VI of Civil Rights Act of 1964

The U.S. Department of the Treasury (Treasury) published a final rule that provides for the enforcement of Title VI of the “Civil Rights Act of 1964.” Title VI states that no person, on the grounds of race, color, or national origin, shall be denied participation in, be denied the benefits of, or be otherwise subject to discrimination under any program or activity that receives federal financial assistance. Even though Title VI has been law since 1964, Treasury has not had a rule to enforce it until now. Prior to this new rule, Treasury merely required recipients of federal financial assistance to sign assurances that they would comply with Title VI.

The new rule applies to the Capital Magnet Fund and the Community Development Financial Institutions (CDFI) Fund. Despite comments from advocates regarding the proposed rule, the final rule does not include the Low Income Housing Tax Credit (LIHTC) program, estimated to cost $8.3 billion in FY17, according to the Congressional Joint Committee on Taxation. Treasury does not consider tax credits to be “federal financial assistance.” 

In the preamble to the final rule, however, Treasury states that the Fair Housing Act of 1968 applies to LIHTC properties, prohibiting discrimination on the basis of race, color, religion, sex, national origin, family status, and disability. Treasury notes that the Fair Housing Act not only prohibits intentional discrimination, but it also prohibits practices that have an unjustified discriminatory effect. Treasury also recognizes that some aspects of the LIHTC program resemble programs that constitute federal financial assistance, stating that the absence of the LIHTC program in the appendix to the rule does not limit the applicability of Title VI to the Civil Rights Act.

Treasury also points to an August 9, 2000 Memorandum of Agreement (MOU) with HUD and the U.S. Department of Justice. Among other provisions, the MOU requires housing finance agencies to report Fair Housing Act noncompliance to the Internal Revenue Service (IRS). The MOU also requires the IRS to notify owners of LIHTC properties facing allegations of housing discrimination that a finding of a violation of the Fair Housing Act could result in the loss of tax credits.

Federal financial assistance is defined in the rule to include grants and loans of federal funds; grants or donations of federal property and interests in property; utilization of federal personnel; sale or lease of and permission to use federal property without consideration or at a nominal consideration, or at a consideration which is reduced for the purpose of assisting a recipient, or in recognition of the public interest; and any federal agreement or contract that has as one of its purposes the provision of assistance.

The August 2000 MOU is at:

The final rule, published on December 13, 2016, is at: