If you’ve ever been in discussions or training regarding fair lending, you may have heard the term “redlining” thrown around from time to time. Redlining is a form of illegal disparate treatment in which a lender provides unequal access to credit, or unequal terms of credit, because of the race, color, national origin, or other prohibited characteristic(s) of the residents of the area in which the credit seeker resides or will reside or in which the residential property to be mortgaged is located. Redlining is a big deal and may violate both the Fair Housing Act and the Equal Credit Opportunity Act.
Jerod explains more in the video.
Video Highlights:
- Redlining is the intentional refusal to lend in certain areas, for example in majority minority areas.
- CRA and/or HMDA data can be utilized to determine where you are and are not lending.
- Redlining will lead to fair lending issues.
Published
2023/06/30
