Redlining
Standard Definition
The illegal practice of lenders refusing to make loans or providing worse terms in specific geographic areas based on neighborhood demographics.
Detailed Examination Analysis
Redlining is a discriminatory practice where financial institutions refuse to provide mortgages or home improvement loans in specific neighborhoods based on racial or ethnic demographics, regardless of the individual applicant's qualifications. This practice is prohibited under the Community Reinvestment Act and the Fair Housing Act.
Real-World Examination Scenario
"A bank draws a line on a map around a neighborhood and refuses to approve mortgages for homes within that boundary. This constitutes illegal redlining."
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