How can one tell whether or not redlining is dicrimination based on race? I've been told that it is not, or at least not proven...

-- Mike Johnson (mpikea@aol.com), December 08, 1998

Answers

Redlining is a loose term that seems to mean illegal discrimination by lenders, usually against racial minorities.

It comes from the idea that a lender drew a red line on a map, showing what areas were in or out of the lending zone.

More recently it has meant excluding a group of people, without regard to their creditworthiness: racial minorities, women, the handicapped, etc. This can take the form of outright denials, but more commonly involves just not marketing to certain neighborhoods, or discouraging applications by certain individuals.

Sometimes it takes the form of effective discrimination, not illegal discrimination. That is, the ECOA forbids actions that don't have a rational business reason but serve to effectively discriminate. Such as requiring all borrowers to own a previous home, or not lending in certain areas, etc.

In the US, discrimination against such "protected classes" is prohibited by the Equal Credit Opportunity Act and the Fair Housing Act. In addition, lending to lower-income neighborhoods is encouraged by the Community Reinvestment Act. The public records that reporters and academics and regulators use to examine for unfair lending practices comes from the Home Mortgage Disclosure Act (home loans) and the Community Reinvestment Act (business and farm loans).

None of these laws deal with the question of whether the person intended to discriminate. Intent is not an element of the crime, so to speak.

In sum, you can tell if discrimination is based on race if similarly situated people of different races are treated differently. Whether that discrimination is irrelevant is irrelevant. Lenders sometimes defend themselves in such cases by saying, "No one intended to discriminate." Or someone will say that discrimination can't be proven because intent isn't proven. But that's not what the laws say.

-- Bill Dedman (bdedman@worldnet.att.net), December 23, 1998.

Redlining is a tool that helps to define how we could best balance neighborhoods and help to dispel prejudice after the buyer moves in. Should not the buyers wish for a specific type of neighborhood be respected? I would like to go into a realtor and ask what areas are diverse, what areas are specifically heavily ethnically compact, ect. Perhaps the issue of ethnicity itself has been taken too far with special treatment to the divesally inept. We are all Americans and we should be given a choice of where we want to live on demand. I am not beyond offering classes to urban dwellers on what suburban protocol is.

-- David Hutchinson (dhutch11@hotmail.com), April 06, 2000.