Title: The History of Lending Discrimination
Headings: The History of Lending Discrimination
The History of Lending Discrimination
Systemic racism still bolsters the racial wealth gap
Key Takeaways
What Is Lending Discrimination?
The Fair Housing Act (FHA) of 1968
Equal Credit Opportunity Act (ECOA) of 1974
Community Reinvestment Act (CRA) of 1977
What Is Redlining?
Home Owners’ Loan Corporation (HOLC)
A Tool for Discrimination
Economic and Racial Segregation From Redlining Persists
Effects of Discriminatory Lending
Corporate Redlining
The Bottom Line
Article Sources

Content: 8 ﻿
A Tool for Discrimination
The HOLC maps were a tool for widespread discrimination. Would-be homeowners in certain areas found it difficult or impossible to get a mortgage, because capital was directed to White families living in green and blue neighborhoods and away from Black and immigrant families in yellow and red neighborhoods. The few loans that were available in redlined areas were very expensive, which made it even harder to buy a home and build wealth. With nearly 65% of its neighborhoods marked in red, Macon, Ga., was the most redlined city in the U.S.
Image source: Mapping Inequality. Here’s a list of the 10 cities with the most neighborhoods marked “hazardous” in the 1930s, per a National Community Reinvestment Coalition (NCRC) study as reported by the informational website NextCity.com. 9 ﻿
Macon, Ga., 64.99%
Birmingham, Ala., 63.91%
Wichita, Kan., 63.87%
Springfield, Mo., 60.19%
Augusta, Ga., 58.70%
Columbus, Ga., 57.98%
Newport News, Va., 57.51%
Muskegon, Mich., 57.24
Flint, Mich., 54.19%
Montgomery, Ala., 53.11%
Economic and Racial Segregation From Redlining Persists
The immediate effect of redlining was that residents in minority neighborhoods couldn’t access capital that could improve the residents’ housing (to buy or renovate) and economic opportunities. Of course, the impacts of redlining didn’t magically end when the FHA was passed in 1968. Instead, as a 2018 study by the National Community Reinvestment Coalition (NCRC) shows, the economic and racial segregation created by redlining persists in many cities today. 10 ﻿
74% of neighborhoods that HOLC graded as “hazardous” more than 80 years ago are low-to-moderate income (LMI) today.