Redlining is a discriminatory practice that puts financial services out of reach for residents of certain areas based on race or ethnicity. It can be seen in the systematic denial of mortgages, insurance, loans and other financial services based on location rather than on an individual’s qualifications and creditworthiness. Coined by sociologist John McKnight in the 1960s, the term derives from how the federal government and lenders would literally draw a red line on a map around the neighborhoods they would not invest in based on demographics alone. Black neighborhoods in cities were most likely to be redlined. Investigations found that lenders would make loans to lower-income White people but not to middle- or upper-income African American residents of the same neighborhoods.
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