Which of the following terms best describes a policy that unfairly targets neighborhoods based on race for loan denials?

Which of the following terms best describes a policy that unfairly targets neighborhoods based on race for loan denials?

• A. Steering
• B. Redlining
• C. Blockbusting
• D. Gentrification

Answer: (B)

The term that best describes a policy that unfairly targets neighborhoods based on race for loan denials is redlining. This practice involves discriminatory lending where financial institutions would delineate areas, often along racial lines, indicating neighborhoods that were deemed high-risk for lending based solely on the racial or ethnic composition of their residents. As a result, residents in these areas were systematically denied mortgages, insurance, and other financial help, leading to long-lasting economic disadvantages and divestment in those communities. Steering refers to the practice of guiding potential homebuyers towards or away from certain neighborhoods based on race, while blockbusting involves encouraging owners to sell their homes at lower prices to facilitate racial change in a neighborhood, often leading to increased sales to minority groups. Gentrification describes the process of renovating and improving a neighborhood, which often leads to increased property values and can displace long-time residents, but does not specifically address the discriminatory aspect of denying loans based on race. Thus, the focus of redlining on denying loans in areas predominantly occupied by certain racial groups makes it the most accurate choice concerning unfair lending practices.

The term that best describes a policy that unfairly targets neighborhoods based on race for loan denials is redlining. This practice involves discriminatory lending where financial institutions would delineate areas, often along racial lines, indicating neighborhoods that were deemed high-risk for lending based solely on the racial or ethnic composition of their residents. As a result, residents in these areas were systematically denied mortgages, insurance, and other financial help, leading to long-lasting economic disadvantages and divestment in those communities.

Steering refers to the practice of guiding potential homebuyers towards or away from certain neighborhoods based on race, while blockbusting involves encouraging owners to sell their homes at lower prices to facilitate racial change in a neighborhood, often leading to increased sales to minority groups. Gentrification describes the process of renovating and improving a neighborhood, which often leads to increased property values and can displace long-time residents, but does not specifically address the discriminatory aspect of denying loans based on race.

Thus, the focus of redlining on denying loans in areas predominantly occupied by certain racial groups makes it the most accurate choice concerning unfair lending practices.