Federal Register / Vol. 88, No. 209 / Tuesday, October 31, 2023 / Proposed Rules 74381 

12 21 CFR 1317.90(c). 13 21 CFR 1317.90(a). 14 79 FR 53520, 53527. 15 Id. at 53522. 16 Id. at 53548. 

controlled substances to a nonretrievable state in order to prevent 

diversion and protect the public health 

and safety.12 The rule also provides that 

controlled substances in a registrant’s 

inventory shall be destroyed in 

compliance with applicable Federal, 

State, tribal, and local laws and 

regulations.13

DEA established the non-retrievable 

standard as the intended final result of 

a registrant’s disposal and destruction 

process in order to prevent the potential 

diversion of controlled substances into 

illegitimate channels. DEA believes the 

permanent and irreversible alteration of 

controlled substances is the cornerstone 

of the non-retrievable standard.14

In the final rule, in order to allow 

public and private entities to develop a 

variety of destruction methods that are 

secure, convenient, and responsible, 

DEA explained that it would not require 

a particular method of destruction, so 

long as the desired result of nonretrievability is achieved, and the 

method is consistent with preventing 

the diversion of controlled substances.15

Comments Requested 

DEA is aware that since the 

publication of the final rule in 2014, 

various chemical and technological 

processes have been developed and 

employed to render controlled 

substances non-retrievable. In the final 

rule, DEA stated its intent that methods 

of destruction should remain current 

with continuously changing 

technology.16 DEA now invites 

stakeholders engaged in the destruction 

and disposal of controlled substances to 

respond to the questions provided in 

this ANPRM. If proprietary information 

is included in the response, please 

submit two copies, and clearly indicate 

which copy ‘‘Contains Confidential 

Information’’, and which is the redacted 

version ‘‘To Be Publicly Posted’’ to 

ensure the correct information is posted 

on Regulations.gov. See Submitting 

Public Comments section, above. 

ANPRM Questions 

Please identify destruction methods 

or technology currently being utilized or 

developed to render the controlled 

substances non-retrievable. For each 

method or technology identified, please 

include: 

1. If known, the potential users of this 

method or technology. 

2. A detailed description of the 

method of destruction or technical 

process utilized to achieve the nonretrievable standard. Does this method 

or technology involve incineration at 

any point to attain the non-retrievable 

standard? 

3. The controlled substance(s) to 

which the method of destruction or 

technology to render the controlled 

substance(s) non-retrievable may be 

applicable. 

4. If known, list any controlled 

substances that will not be rendered 

non-retrievable by this method. 

5. The volume or throughput (per 

hour) required to render the controlled 

substance non-retrievable. 

6. The registrant’s anticipated cost to 

execute, implement, or utilize the 

method of destruction or technology 

discussed above. 

7. The analytical process utilized to 

evaluate the effectiveness of the method 

of destruction or technology. Provide 

the analytical results validating 

attainment of the non-retrievable 

standard. 

8. The characteristics or constituents 

of any by-products or waste generated 

through the process used to render the 

controlled substance non-retrievable. 

Provide the waste profile sheet or 

similar documentation showing 

analytical results of the by-products or 

waste generated. 

9. The disposal process of the byproducts or waste generated. 

10. The Federal, state, or local 

regulatory requirements associated with 

the disposal process and/or disposal of 

the by-products or waste. 

Regulatory Analysis 

This ANPRM was developed in 

accordance with the principles of 

Executive Order (E.O.) 12866, 

‘‘Regulatory Planning and Review,’’ E.O. 

13563, ‘‘Improving Regulation and 

Regulatory Review,’’ and E.O. 14094, 

‘‘Modernizing Regulatory Review.’’ 

Since this action is an ANPRM, it does 

not create or propose to create any new 

requirements. Therefore, this regulatory 

action is not significant under section 

3(f) of E.O. 12866. 

Furthermore, the requirements of the 

Regulatory Flexibility Act do not apply 

to this action because, at this stage, it is 

an ANPRM and not a ‘‘rule’’ as defined 

in 5 U.S.C. 601. Following review of the 

comments received in response to this 

ANPRM, if DEA proceeds with a notice 

of proposed rulemaking regarding this 

matter, DEA will conduct all relevant 

analyses as required by statute or 

Executive Order. 

Signing Authority 

This document of the Drug 

Enforcement Administration was signed 

on October 26, 2023, by Administrator 

Anne Milgram. That document with the 

original signature and date is 

maintained by DEA. For administrative 

purposes only, and in compliance with 

requirements of the Office of the Federal 

Register, the undersigned DEA Federal 

Register Liaison Officer has been 

authorized to sign and submit the 

document in electronic format for 

publication, as an official document of 

DEA. This administrative process in no 

way alters the legal effect of this 

document upon publication in the 

Federal Register. 

Scott Brinks, 

Federal Register Liaison Officer, Drug 

Enforcement Administration. 

[FR Doc. 2023–23984 Filed 10–30–23; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Parts 115 and 125 

[Docket No. FR–6355–P–01] 

RIN 2529–AB07 

Removing Criminal Conviction 

Restrictions for Testers in FHIP- and 

FHAP-Funded Testing Programs 

AGENCY: Office of Fair Housing and 

Equal Opportunity, HUD. 

ACTION: Proposed rule. 

SUMMARY: Through this proposed rule, 

the U.S. Department of Housing and 

Urban Development (HUD) seeks to 

eliminate the tester restrictions for Fair 

Housing Initiatives Program (FHIP) 

grantees and for Fair Housing 

Assistance Program (FHAP) agencies 

that forbid FHIP and FHAP recipients 

from using fair housing testers with 

prior felony convictions or convictions 

of crimes involving fraud or perjury. 

This proposed rule would make HUD’s 

programs as inclusive as possible for 

people with criminal records, consistent 

with Secretary Marcia Fudge’s April 12, 

2022 Memorandum, ‘‘Eliminating 

Barriers That May Unnecessarily 

Prevent Individuals with Criminal 

Histories from Participating in HUD 

Program,’’ and 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. 

DATES: Comment due date: January 2, 

2024. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 


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74382 Federal Register / Vol. 88, No. 209 / Tuesday, October 31, 2023 / Proposed Rules 

1 ‘‘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. 

2Section 561(e). 

3 53 FR 25581 (July 7, 1988). 

4 54 FR 6492, 6501 (Feb. 10, 1989). 

5Public Law 102–550, October 28, 1992, 106 Stat. 

3672. 

this proposed rule. There are two 

methods for submitting public 

comments. All submissions must refer 

to the above docket number and title. 

1. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street SW, Room 10276, 

Washington, DC 20410–0500. 

2. Electronic Submission of 

Comments. Interested persons may 

submit comments electronically through 

the Federal eRulemaking Portal at 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit a comment, ensures timely 

receipt by HUD, and enables HUD to 

make them immediately available to the 

public. Comments submitted 

electronically through the 

www.regulations.gov website can be 

viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Note: To receive consideration as 

public comments, comments must be 

submitted through one of the two 

methods specified above. Again, all 

submissions must refer to the docket 

number and title of the rule. 

No Facsimile Comments. Facsimile 

(FAX) comments are not acceptable. 

Public Inspection of Comments. All 

properly submitted comments and 

communications submitted to HUD will 

be available for public inspection and 

copying between 8 a.m. and 5 p.m. 

weekdays at the above address. Due to 

security measures at the HUD 

Headquarters building, an advance 

appointment to review the public 

comments must be scheduled by calling 

the Regulations Division at 202–402– 

3055 (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. 

Copies of all comments submitted are 

available for inspection and 

downloading at www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Demetria McCain, Principal Deputy 

Assistant Secretary for Fair Housing and 

Equal Opportunity, Department of 

Housing and Urban Development, Office 

of Fair Housing and Equal Opportunity, 

451 7th Street SW, Room 5250, 

Washington, DC 20410–8000, telephone 

number 202 402–7861 (this is not a tollfree 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 

On April 12, 2022, Secretary Marcia 

Fudge directed 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.’’ 1 Two HUD 

programs, the Fair Housing Initiative 

Program (FHIP) and the Fair Housing 

Assistance Program (FHAP) fund local 

private and governmental agencies who 

further enforcement of the Fair Housing 

Act. Current regulations forbid these 

entities from using these program funds 

for fair housing testing that involves 

testers with prior felony convictions or 

convictions of crimes involving fraud or 

perjury. The applicable regulations 

containing these restrictions can be 

found at 24 CFR 125.107(a) (the FHIP 

regulation) and 24 CFR 115.311(b) (the 

FHAP regulation). 

A. Fair Housing Initiatives Program 

(FHIP) 

In 1987, Congress established the 

FHIP to strengthen the Department’s 

enforcement of the Fair Housing Act 

and to further fair housing. This 

program funds, among other things, 

‘‘testing’’ activities undertaken by fair 

housing organizations and other private 

non-profits designed to enhance 

enforcement of the Fair Housing Act. 

Testing refers to the use of an 

individual or individuals (‘‘testers’’) 

who, without a bona fide intent to rent 

or purchase a house, apartment, or other 

dwelling, pose as prospective renters or 

purchasers for the purpose of gathering 

information that may indicate whether a 

housing provider is complying with fair 

housing laws. 

B. History of the FHIP and its Testing 

Guidelines 

Section 561 of the Housing and 

Community Development Act of 1987 

(Section 561) established the FHIP as a 

temporary program, and specifically 

required HUD to ‘‘establish guidelines 

for testing activities funded under the 

private enforcement initiative of the fair 

housing initiatives program.’’ Section 

561 noted 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.’’ In the FHIP’s first 

iteration, the enabling law imposed a 

sunset on the ‘‘demonstration period’’ 

for September 30, 1989.2

In 1988, HUD proposed regulations 

for the demonstration period that, 

among many other requirements, forbid 

testers under the FHIP from having 

‘‘prior felony convictions or convictions 

of crimes involving fraud or perjury.’’ 

This restriction followed a proposed 

requirement for a ‘‘formal recruitment 

process designed to obtain a pool of 

credible and objective persons to serve 

as testers.’’ 3

The Department’s FHIP 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 

§ 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.4 The 1989 final rule for the 

demonstration period describes 

comments both in support and in 

opposition of the proposed guidelines. 

None of the comments pertained 

specifically to the conviction 

restrictions for testers. Accordingly, 

HUD did not discuss that particular 

portion of the guidelines in the final 

rule. 

Section 953 of the Cranston-Gonzalez 

National Affordable Housing Act 

(November 28, 1990) extended the FHIP 

sunset to September 30, 1992. Then in 

1992, Congress made the FHIP program 

permanent through the Housing and 

Community Development Act of 1992 

that codified the FHIP provisions in the 

Fair Housing Act at 42 U.S.C. 3616a.5


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6 60 FR 58452, 58453 (Nov. 27, 1995). 

7 59 FR 44596–01 (Aug. 29, 1994) (‘‘The 

Department considered two factors to be significant 

and determinative in the decision to eliminate 

testing guidelines from the regulation. First, in the 

original authorizing statute for FHIP, Congress 

specifically limited the requirement for testing 

guidelines to the demonstration period; and second, 

Congress did not include this requirement in its 

permanent authorization of FHIP by section 905.’’) 

8 In addition to the conviction restrictions, 24 

CFR 125.107 also imposes these requirements on 

testers: (b) Testers must receive training or be 

experienced in testing procedures and techniques, 

and (c) Testers and the organizations conducting 

tests, and the employees and agents of these 

organizations may not: (1) Have an economic 

interest in the outcome of the test, without 

prejudice to the right of any person or entity to 

recover damages for any cognizable injury; (2) Be 

a relative of any party in a case; (3) Have had any 

employment or other affiliation, within one year, 

with the person or organization to be tested; or (4) 

Be a licensed competitor of the person or 

organization to be tested in the listing, rental, sale, 

or financing of real estate. 

9See 42 U.S.C. 3610(f); 24 CFR part 115. 10See The Fair Housing Act: HUD Oversight, 

Programs, and Activities, Congressional Research 

Service R44557 (April 7, 2021) (citing 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. 11 45 FR 31880 (May 14, 1980). 12 Id.; 47 FR 8991 (March 3, 1982); 53 FR 34668 

(Sept. 7, 1988); 54 FR 20094 (May 9, 1989). 13 61 FR 7674 (Feb. 28, 1996); 61 FR 41282 (Aug. 

7, 1996). 

14 ‘‘Testing refers to the use of an individual or 

individuals (‘‘testers’’) who, without a bona fide 

intent to rent or purchase a house, apartment, or 

other dwelling, pose as prospective renters or 

purchasers for the purpose of gathering information 

that may indicate whether a housing provider is 

complying with fair housing laws.’’ 70 FR 28748 

(May 18, 2005); 72 FR 19070 (Apr. 16, 2007); 

currently codified at 24 CFR 115.100(c). 

15 70 FR 28748 (May 18, 2005); 72 FR 19070 (Apr. 

16, 2007); currently codified at 24 CFR 115.311(b). 

Unlike the FHIP criminal conviction restriction, the 

FHAP restriction was not proceeded by any 

reference to credibility. 

16FRE 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). 

17Specifically, although FRE 609(a)(1)(A) 

requires the admission of a crime that was 

punishable by death or by imprisonment for more 

than one year (what is often categorized as a 

felony), this requirement is explicitly subject to 

Rule 403. Rule 403 says that a court may exclude 

relevant evidence if its probative value is 

substantially outweighed by a danger of one or 

more of the following: unfair prejudice, confusing 

the issues, misleading the jury, undue delay, 

wasting time, or needlessly presenting cumulative 

evidence. Although FRE 609(a)(2) requires 

admission of any crime if the elements of the crime 

required proving—or the witness’s admitting—a 

dishonest act or false statement (i.e., crimes of 

dishonesty), evidence of the conviction is 

admissible only if its probative value, supported by 

specific facts and circumstances, substantially 

outweighs its prejudicial effect, if the conviction is 

older than 10 years. See FRE 609(b). Also under 

both categories, juvenile convictions are explicitly 

not admissible. 609(d). Nor are convictions that 

Continued 

The guidelines section at 24 CFR 

125.405 that had been established in 

1989 changed significantly when 

regulations for the permanent program 

were issued in 1995, but the tester 

conviction restriction remained.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. The revised 

§ 125.405 [retitled ‘‘Testers’’] proposed 

here would remove the testing 

guidelines, but would still require that 

testers must not have prior felony 

convictions or convictions of crimes 

involving fraud or perjury, and that they 

receive training or be experienced in 

testing procedures and techniques.’’ 7

HUD did not provide an explanation 

for why it chose to retain the tester 

restriction in the 1994 final rule. Like 

with the 1989 final rule, HUD received 

comments in support of and in 

opposition to removing most of the 

testing guidelines, but none of the 

comments discussed the tester 

conviction portion that remained. The 

operative section was moved to 24 CFR 

125.07—Testers: 8 ‘‘The following 

requirements apply to testing activities 

funded under the FHIP: a) Testers must 

not have prior felony convictions or 

convictions of crimes involving fraud or 

perjury.’’ This language has not changed 

since 1995. 

C. The Fair Housing Assistance Program 

(FHAP) 

While the FHIP funds private nonprofits to assist in enforcement of the 

Fair Housing Act and substantially 

equivalent local laws, the FHAP funds 

State and local governmental agencies to 

do the same. Section 817 of the Fair 

Housing Act, 42 U.S.C. 3616, provides 

that the Secretary may reimburse State 

and local fair housing enforcement 

agencies that assist the Secretary in 

enforcing the Act. HUD has 

implemented section 817 at subpart C of 

24 CFR part 115, which sets forth the 

requirements for participation in the 

FHAP. Under the FHAP, a State or local 

agency is certified for participation if 

the Department determines that the 

agency adequately enforces a law or 

laws that provide rights, procedures, 

remedies, and judicial review 

provisions that are substantially 

equivalent to the federal Fair Housing 

Act.9

D. History of the FHAP and its Testing 

Guidelines 

In 1980, the Carter administration 

asked Congress to authorize funding for 

HUD to assist State and local agencies 

in enforcing fair housing laws, citing 

limitations that localities had in 

processing fair housing complaints. This 

request was approved by Congress in 

Public Law 96–103 (FY1980 

Appropriations Act for HUD), which 

marked the establishment of the 

FHAP.10 That same year, HUD issued an 

interim final rule that established ‘‘the 

eligibility criteria for participants in the 

Fair Housing Assistance Program 

(FHAP) and the minimum standards 

which specific project proposals must 

meet.’’ 11 HUD issued subsequent rules 

for the FHAP in 1982, 1988, and 1989. 

None of these initial rules addressed fair 

housing testing in any way.12 The 

interim and final rules in 1996 mention 

testing only to note that any ordinances 

that include ‘‘anti-testing provisions’’ 

would prevent a jurisdiction from 

achieving substantially equivalent 

status.13 In 2005, HUD first addressed 

the criminal backgrounds of FHAP 

testers in FHAP regulations. 

The proposed rule in 2005 and final 

rule in 2007 created a new definition of 

testing 14 and included a new section on 

testing, which read in part: ‘‘The 

following requirements apply to testing 

activities funded under the FHAP: [. . .] 

Testers must not have prior felony 

convictions or convictions of any crimes 

involving fraud or perjury.’’ 15 There 

was no commentary about this 

restriction from the public or HUD in 

these rules. 

E. Basis for Tester Restrictions 

As is explained above, in 1987, 

Congress required HUD to establish 

guidelines for the FHIP demonstration 

period that would help ensure that FHIP 

grantees’ investigations developed 

‘‘credible evidence’’ of discriminatory 

housing practices. While HUD has never 

been explicit, it presumably first 

enacted the restrictions on testers’ 

criminal histories 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) 

609, which provides that certain 

criminal convictions may be admitted to 

attack witness’s ‘‘character for 

truthfulness.’’ 16

Specifically, in civil cases where the 

witness is not the defendant, FRE 609 

requires the admission of evidence of 

two categories of criminal convictions: 

(1) a crime punishable by death or 

imprisonment for more than one year, 

and (2) any conviction of a crime 

involving dishonesty or false statement. 

However, both categories are subject to 

a number of exceptions that limit 

admissibility.17


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have been the subject of a pardon, annulment, 

certificate of rehabilitation, or other equivalent 

procedure based on a finding of innocence. 609(b). 

18Several fair housing organizations from across 

the country recently wrote HUD noting that 

‘‘[p]eople with conviction histories commonly 

testify credibly in civil matters, and organizations 

can make individual determinations, consistent 

with HUD and EEOC guidance, as to the facts or 

circumstances surrounding the proposed tester’s 

criminal conduct and whether these facts would be 

likely to present barriers to credibility. . . 

Critically, the vast majority of fair housing testers 

never testify at trial at all, nor is eliciting trial 

testimony a primary purpose of testing. Instead, test 

results often serve as the basis to start a broader 

investigation and enforcement strategy and provide 

helpful data to guide education efforts. 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.’’ 

19See also, id., noting that ‘‘39 of the 50 states 

allow for single party consent to record, which 

means that tests are audio recorded in most states, 

removing any doubt about the veracity of 

accounts.’’ 

20See, e.g., Recording Phone Calls and 

Conversations: 50-State Survey, available at https:// 

www.justia.com/50-state-surveys/recording-phonecalls-and-conversations/. 

21 24 CFR 115.311(c); 24 CFR 125.107(b). 

22 24 CFR 115.311(d)(1); 24 CFR 125.107(c)(1). 

23 24 CFR 115.311(d)(2); 24 CFR 125.107(c)(2). 

24 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). 

25 24 CFR 115.311(d)(4); 24 CFR 

125.107(c)(4)(specifying such ‘‘licensed’’ 

competitors are barred from conducting testing). 

26Mont. Code Ann. Rule 26–10–609. 

27Ric Simmons, An Empirical Study of Rule 609 

and Suggestions for Practical Reform, 59 B.C. L. 

Rev. 993 (2018). 

28See, e.g., Sanchez v. Jiles, No. CV 10–09384 

MMM (OPx) ‘‘Final Order on Motions In Limine’’ 

2012 U.S. Dist. LEXIS 200372 (C.D. Cal. June 14, 

2012) (finding felony convictions involving fraud 

and forgery to not highly relevant to the plaintiff’s 

witness’s credibility and ordering that defendants 

not introduce it into evidence); 3 Federal Rules of 

Evidence Manual § 609.03 (2022). 

29HUD has been contacted by fair housing 

organizations urging reform of the 24 CFR 105.107 

because its restrictions prevent fair housing centers 

from testing for certain types of criminal 

background discrimination by preventing them 

from employing testers with felonies to test the 

entire application process. 

30See 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). 

31See, e.g., id. at 12 (describing a 2005 survey of 

large landlords which revealed that 80 percent 

screened prospective tenants for criminal histories). 

F. How HUD’s Conviction Restrictions 

Are Overbroad, Outdated, and 

Unnecessary 

Notably, the disqualifying convictions 

covered by HUD’s regulations are much 

broader than those in FRE–609. For 

example, unlike 609, HUD’s current 

regulations always disqualify testers for 

prior convictions, even those that are 

over 10 years old and have little or no 

probative value. In addition, HUD’s 

current regulations do not have explicit 

carve outs for testers whose convictions 

have been the subject of a pardon, 

annulment, certificate of rehabilitation 

or similar findings of innocence. 

Moreover, HUD’s current regulations 

may disqualify testers with certain 

juvenile convictions. 

More broadly, even with respect to 

convictions that could be admissible 

under FRE 609, HUD now sees 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.18

Based on HUD’s experience 

investigating fair housing complaints, 

testers today generally audio and/or 

video record their testing experiences, 

meaning that the recordings—not the 

testers’ testimony—are of utmost 

importance in most fact-finding 

hearings.19 Recording fair housing tests 

has become ubiquitous as cost of 

devices and technology has gone down 

and the utility of such recordings has 

become evident. Such recording is not 

only relatively inexpensive, it is also 

explicitly legal: Federal law and state 

law in many states allow a party to a 

communication like a telephone call to 

record without the knowledge or 

consent of other parties.20 In many 

cases, sharing recorded evidence of fair 

housing testing facilitates early 

resolution and settlement, negating the 

need to interrogate tester credibility. 

And in housing discrimination cases 

that go to trial, the main role of testers 

as witnesses is to introduce the recorded 

evidence of the interaction, not to 

recount their experience in detail. In 

short, testing evidence often speaks for 

itself and a tester merely needs to be 

credible enough for the judge or jury to 

believe their testimony that the 

recording being presented is an 

authentic recording of the events at 

issue in the case. 

In addition, other requirements in 

these regulations that will continue to 

apply to testers 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.21 Testers cannot have 

an economic interest in the outcome of 

the test; 22 be a relative or acquaintance 

of any party in the case; 23 have had a 

recent employment history or other 

affiliation with the person or 

organization to be tested; 24 or be a 

competitor (or licensed competitor) of 

the person or organization to be tested.25

HUD also observes that FRE 609 itself 

is not always applied even where a 

crime of conviction comes under its 

potential application. First, fair housing 

cases using testers are not only heard in 

federal courts; they are also heard in 

state courts, which sometimes have 

different rules of evidence. At least one 

state (Montana) has chosen to adopt a 

Rule 609 variation that prohibits 

admission of evidence that a witness 

has been convicted of a crime for the 

purpose of attacking the credibility of a 

witness, explaining that ‘‘[t]he 

Commission does not accept as valid the 

theory that a person’s willingness to 

break the law can automatically be 

translated into willingness to give false 

testimony’’ and that conviction 

evidence has ‘‘low probative value in 

relation to credibility.’’ 26 And even in 

Federal courts, while no survey appears 

to have been conducted to see the 

frequency with which judges admit 

prior convictions to impeach witnesses 

in civil matters, one survey done in the 

criminal context has shown that 

‘‘federal judges do not routinely admit 

prior convictions to impeach criminal 

defendants.’’ 27 Judges sometimes 

exclude or find unpersuasive prior 

criminal convictions of witnesses in 

civil matters, preferring to focus on 

more reliable indicators of credibility 

tied to the facts of the case at hand.28

Ultimately, HUD believes it is better left 

to FHIP and FHAP funded entities to 

decide whether to hire a tester with 

criminal convictions, as they are in the 

best position to know and be able to 

weigh the risk that a testers’ former 

criminal convictions will be admitted— 

and matter—in their local courts, and 

based on the kind of testing that will be 

done. 

Indeed, HUD recognizes 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.29

When the restrictions on testers’ 

criminal histories were first 

promulgated as a demonstration 

regulation in 1989, housing providers 

were unlikely to conduct criminal 

background checks on prospective 

applicants.30 Since then, landlords have 

increasingly implemented policies and 

practices to screen applicants based on 

their criminal backgrounds—including 

those with felony convictions and 

convictions involving fraud or 

perjury.31


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32See 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).’’) 

33The Fair Housing Act prohibits discrimination 

in the sale, rental, or financing of dwellings and in 

other housing-related activities on the basis of race, 

color, religion, sex, disability, familial status or 

national origin. 42 U.S.C. 3601 et seq. 

34See 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). 

35See, e.g., 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 housing 

provider may have a policy in writing that differs 

from a policy in practice, and that fully 

‘‘[i]dentif[ing] all policies, including written and 

unwritten policies or practices’’ is an important first 

step in investigating the potential discriminatory 

effects of a policy. 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. 

36See, e.g., Locked Out: Criminal Background 

Checks as a Tool for Discrimination, available at 

https://lafairhousing.org/wp-content/uploads/2021/ 

12/Criminal_Background_Audit_FINAL.pdf. This 

report demonstrates how a FHIP grantee was able 

to uncover evidence that criminal records policies 

were being used as pretext for intentional 

discrimination by showing that landlords used the 

criminal backgrounds of black testers to treat those 

testers less favorably at the pre-application stage 

compared to white testers, even though the black 

and white testers had similar (but made-up) 

criminal backgrounds. The investigation found that 

paired white testers were quoted more lenient 

criminal records policies than black testers, were 

encouraged to apply where black testers were 

discouraged, and were uniquely told that 

exceptions would be made to the landlord’s 

criminal records policies. These investigations were 

not able to see if landlords were discriminating 

after applications were submitted, however, 

because the criminal histories of the testers were 

not real. If this FHIP grantee was able to use paired 

testers with actual similar criminal backgrounds, it 

would have the ability to investigate the 

discriminatory use of a criminal records policy 

beyond just the pre-application stage. 

37See footnote 7 (citing 59 FR 44596–01 (Aug. 29, 

1994)). Of note, even if HUD had taken the position 

that 561(c)(2) of the 1987 Act was still in effect, that 

section of the Act only required, generally, for HUD 

to ‘‘establish guidelines for testing activities funded 

under the private enforcement initiative of the fair 

housing initiatives program . . . to ensure that 

investigations in support of fair housing 

enforcement efforts . . . develop credible and 

objective evidence of discriminatory housing 

practices.’’ § 561(c)(2) of the Housing and 

Community Development Act of 1987. It did not 

require restricting testers based on their criminal 

history in order to ensure credible and objective 

evidence. 

In 2016, HUD issued a memo 

explaining how these kinds of 

admissions policies and practices may 

be discriminatory under the Fair 

Housing Act.32 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.33 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.34

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. For example, 

testers with no criminal histories cannot 

submit actual applications to test a 

criminal records screening policy where 

the landlord runs a typical computerbased ‘‘background check’’ on its 

applicants; they are limited to 

investigating discrimination that occurs 

pre-application. Testers without 

criminal backgrounds can inquire about 

what a criminal records policy is at a 

property, reveal a fabricated history, and 

ask whether they would be accepted or 

rejected. However, 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 35 and whether the 

policy is being applied (after the 

application is submitted) in a 

discriminatory manner. Absent a change 

in regulation, FHIP and FHAP funded 

entities do not have the option of 

conducting testing using HUD funds 

that investigates modern criminal 

records policies through the application 

phase.36

Finally, 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. These 

issues are particularly problematic in 

the context of a fair housing 

investigation, where sometimes people 

with criminal records are best able to 

investigate discriminatory activity, and 

where a factfinder is particularly 

unlikely to find a tester’s criminal 

records to undermine their credibility 

(as in the common case where testing 

evidence is audio and/or video recorded 

and speaks for itself). 

G. Removing the Tester Conviction 

Restrictions Is Legally Permissible 

Outside of the considerations 

discussed above, removing these 

restrictions is legally permissible. As 

HUD has previously noted, the original 

authorizing statute for the FHIP 

specifically limited the requirement for 

testing guidelines to the demonstration 

period. Congress did not include this 

requirement in its permanent 

authorization of the FHIP. HUD 

maintains the position that it took in 

1994 that HUD is not required by any 

statute to have regulations containing 

testing restrictions for the permanent 

FHIP.37 Nor are these restrictions 

statutorily required for the FHAP. 

II. This Proposed Rule 

This rule proposes to amend the 

regulations in 24 CFR part 115 and 125 

for the reasons discussed above. 

At 24 CFR 115.311, the proposed 

regulatory text would delete paragraph 

(b), which wholly contains the tester 

background restriction but no other 

content. 

At 24 CFR 125.107, the proposed 

regulatory text would delete paragraph 

(a) which wholly contains the tester 

background restriction but no other 

content. 

HUD seeks comments on these 

proposals. 

III. Findings and Certifications 

Regulatory Review—Executive Orders 

12866, 13563, and 14094 

Under Executive Order 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. Executive Order 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.’’ Executive 

Order 13563 also directs that, where 


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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. Executive Order 

14094 entitled ‘‘Modernizing Regulatory 

Review’’ (hereinafter referred to as the 

‘‘Modernizing E.O.’’) amends section 

3(f) of Executive Order 12866 

(Regulatory Planning and Review), 

among other things. 

The proposed rule would revise 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. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (Pub. L. 104–4; 

approved March 22, 1995) (UMRA) 

establishes requirements for Federal 

agencies to assess the effects of their 

regulatory actions on state, local, and 

tribal governments, and on the private 

sector. This proposed rule would not 

impose any Federal mandates on any 

state, local, or Tribal Government, or on 

the private sector, within the meaning of 

the UMRA. 

Environmental Review 

This proposed 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). 

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 rule 

would 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. 

Accordingly, it is HUD’s determination 

that this proposed rule will not have a 

significant economic impact on a 

substantial number of small entities. 

Executive Order 13132, 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 or 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 

rule would not have Federalism 

implications and would not impose 

substantial direct compliance costs on 

state and local governments or preempt 

state law within the meaning of the 

Executive order. 

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. 

Accordingly, for the reasons described 

in the preamble, HUD proposes to 

amend 24 CFR 115 and 125 as follows: 

PART 115—CERTIFICATION AND 

FUNDING OF STATE AND LOCAL FAIR 

HOUSING ENFORCEMENT AGENCIES 

■ 1. The authority citation for part 115 

continues to read as follows: 

Authority: 42 U.S.C. 3601–19 and 42 

U.S.C. 3535(d). 

§ 115.311 [Amended] 

■ 2. In § 115.311, remove paragraph (b), 

redesignate paragraph (c) as paragraph 

(b), and redesignate paragraphs (d) 

through (d)(4) as paragraphs (c) through 

(c)(4). 

PART 125—FAIR HOUSING 

INITIATIVES PROGRAM 

■ 3. The authority citation for part 125 

continues to read as follows: 

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

§ 125.107 [Amended] 

■ 4. In § 125.107, remove paragraph (a), 

redesignate paragraph (b) as paragraph 

(a), and redesignate paragraphs (c) 

through (c)(4) as paragraphs (b) through 

(b)(4). 

Demetria McCain, 

Principal Deputy, Assistant Secretary for Fair 

Housing and Equal Opportunity. 

[FR Doc. 2023–23678 Filed 10–30–23; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF THE TREASURY 

Bureau of the Fiscal Service 

31 CFR Part 323 

[FISCAL–2023–0002] 

RIN 1530–AA28 

Disclosure of Records 

AGENCY: Bureau of the Fiscal Service, 

Department of the Treasury. 

ACTION: Notice of proposed rulemaking 

with request for comment. 

SUMMARY: The Bureau of the Fiscal 

Service within the Department of the 

Treasury (Fiscal Service or Treasury) 

proposes to adopt regulations to 

implement statutory requirements under 

the SECURE 2.0 Act of 2022 requiring 

Treasury to provide information on 

applicable savings bonds to states. A 

state receiving the information with 

respect to an applicable savings bond 

may use the information to locate the 

owner of the bond pursuant to 

Treasury’s regulations and the state’s 

own standards and requirements under 

abandoned property rules and 

regulations of the state. Regulations 

adopted by Treasury are required to 

protect the privacy of savings bond 

owners, prevent fraud, and ensure that 

any information disclosed to a state 

under these rules shall be used solely to 

locate savings bond owners. 

DATES: Comments on the proposed rule 

must be received by November 30, 2023. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Federal eRulemaking Portal: 

www.regulations.gov. Follow the 

instructions on the website for 

submitting comments. 

• Mail: Department of the Treasury, 

Bureau of the Fiscal Service, Attn: 


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