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the lender refuses to lend in that neighborhood, the lender is guilty of redlining.
What is redlining?
Redlining is a technique that excludes potential customers who live in neighborhoods that are deemed "hazardous" to investment because of the high concentration of low-income and racial and ethnic minorities there from receiving services (financial and otherwise). The most well-known examples of redlining are the rejection of insurance and credit, but other, less well-known examples include the formation of food deserts in minority neighborhoods and the denial of healthcare. The deliberate placement of stores inconveniently far from targeted residents has a redlining effect in the case of retail businesses like supermarkets. When a lender or insurer took advantage of the lack of lending competition compared to non-redlined neighborhoods to target residents of communities with a preponderance of minorities, this practice is known as reverse redlining.
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