In the United States, Redlining is a systematic denial of various services to a resident, environment or community, racially, directly or through selective price increases. Although the most famous redlining example has involved the denial of financial services such as banking or insurance, other services such as health care or even supermarkets have been denied to residents. In the case of retail businesses such as supermarkets, deliberately puts it impractical far from the word residents redlining effect results. Reverse redlining occurs when a lender or insurance company targets a predominantly white-dominated environment, not to deny a loan or resident insurance, but rather to charge them more than in a non-redlined environment where there is more competition.
In the 1960s, sociologist John McKnight coined the term "redlining" to describe discriminatory practices of fencing in areas where banks would avoid investments based on community demographics. During the heyday of redlining, the area most often discriminated against is the inner-city black environment. For example, in Atlanta in the 1980s, a series of Pulitzer Prize-winning articles by investigative journalist Bill Dedman showed that banks would often lend to low-income white people but not to middle or upper blacks. The use of blacklists is a related mechanism that is also used by the redliner to track groups, territories, and perceived persons discriminating against should be denied business or other assistance or transactions. In the academic literature, redlining falls under the broader category of credit allotment.
Video Redlining
History
Although informal discrimination and segregation has existed in the United States, a special practice called "redlining" began with the National Housing Act of 1934, which established the Federal Housing Administration (FHA). Racial segregation and discrimination against minorities and minority communities have existed before. The implementation of this federal policy exacerbates the inner-city environmental decay caused by the cutting of mortgage capital, and makes it even more difficult for the environment to attract and keep families who can buy homes. The assumption in redlining resulted in a major increase in racial segregation of housing and municipal destruction in the United States.
In 1935, the Federal Home Loan Bank Board (FHLBB) requested Home Ownership Loan (HOLC) to look at 239 cities and create "housing security maps" to show the level of security for real estate investments in each surveyed city. On the map, the most recent area - which is considered desirable for lending purposes - is outlined in green and is known as "Type A". This is a normally prosperous suburb in the suburbs. The "Type B" environment, outlined in blue, is considered "Still Desirable," while the older "Type C" is labeled "Descending" and underlined in yellow. The "Type D" environment is outlined in red and is considered the most risky for mortgage support. These neighborhoods tend to be older districts downtown; often they are also black environment. The town planning historians theorized that the map was used by private and public entities for many years thereafter to refuse loans to people in the black community. However, recent research indicates that HOLC is not redline in its own lending activities and that racist language reflects the bias of the private sector and the experts hired to conduct the assessment.
Some remarketed maps are also created by private organizations, such as maps J.M. Brewer's in 1934 in Philadelphia. Private organizations create maps designed to meet the requirements of the Federal Housing Administration's underwriting manual. Lenders should consider FHA standards if they wish to receive FHA insurance for their loans. The FHA assessment guide book instructs banks to avoid areas with "racial groups that are not harmonious", and recommends that the municipality establish rigorous zoning procedures racially.
Following the National Housing Conference in 1973, a group of Chicago community organizations led by the Northwest Community Organization (NCO) formed the National People's Action (NPA), to expand the fight against disinvestment and mortgages in various neighborhoods throughout the country. The organization, led by Chicago housewives Gale Cincotta and Shel Trapp, a professional community organizer, targets the Federal Home Loan Bank Board, the governing authority on savings & amp; The credit institution (S & amp; L) held at the time was largely a mortgage of a country house. The NPA began an effort to build a national coalition of urban community organizations to issue national disclosure laws or legislation to require banks to disclose their borrowing patterns.
Over the years, urban community organizations have fought against environmental decay by attacking blockbusting, forcing landlords to guard the property, and requiring the city to ascend and destroy the abandoned property. These actions are aimed at short-term issues about environmental degradation. Environmental leaders are beginning to learn that these problems and conditions are a symptom of disinvestment that is the real, though hidden, hidden cause of these problems. They changed their strategy because more data was collected.
With the help of the NPA, a coalition of loosely affiliated community organizations began to take shape. At the Third Annual Housing Conference held in Chicago in 1974, eight hundred delegates representing 25 states and 35 cities attended. This strategy focuses on the Federal Home Loan Bank Board (FHLBB), which oversees S & L in cities across the country.
In 1974, the Chicago Metropolitan Housing Association (MAHA), composed of representatives of local organizations, succeeded in enacting legislative laws of the State of Illinois mandating disclosure and prohibiting redlining. In Massachusetts, organizers allied with the NPA face a unique situation. Over 90% of mortgages are held by state-saving banks. A Jamaica Plain environmental organization is pushing the issue of disinvestment into state-wide gubernatorial elections. The Jamaica Plain Banking & amp; The Mortgage Committee and its affiliates throughout the city, The Boston Anti-redlining Coalition (BARC), won a commitment from Democratic candidate Michael S. Dukakis to order the state-wide revelation through the Massachusetts State Banking Commission. After Dukakis was elected, his new Banking Commissioner ordered the bank to disclose the pattern of a mortgage loan with a zip code. The suspected redlining is revealed.
The NPA and its affiliates achieved disclosure of loan practices with the passage of the House Mortgage Disclosure Act of 1975. The necessary transparency and review of loan practices began to change lending practices. The NPA began work on reinvestment in neglected areas. Their support helped acquire a share in 1977 of the Community Reinvestment Act.
Maps Redlining
Effect
According to blackpast.org contributor, Brent Gaspaire:
As a consequence of redlining, the environment deemed unfeasible by local banks for investment does not develop or is in a state of disrepair. Attempts to improve the environment with relatively small business ventures are usually hindered by financial institutions that continue to label guarantees as being too risky or directly rejected outright. When businesses are collapsing, new ones are not allowed to replace them, often leaving the entire block empty and collapsing. As a result, African-Americans in the neighborhood are often limited in their access to banking, health care, retail merchandise, and even groceries.
Redlining paralyzes the housing market, lowers property values ​​in certain areas and encourages the neglect of landlords. As the neglect increases, the population density becomes lower. Abandoned buildings serve as a place to deal with drugs and other illegal activities, increasing social problems and the reluctance of people to invest in these areas. Because the redlined areas residents in it can not obtain loans to repair their homes or get loans to move to different areas. Of course, the environment does not have an investment while the environment around them increases. When the GI Bill was created during World War II, veterans who had lived in the redline areas could not get a zero interest loan to build a new home like the rest of the returned soldiers. This forced them to live in poor and uninvested areas while the rest of America grew and moved to the suburbs. Around the same time as GI Bill was invented, the Federal Highway Act was also created. Because the re-organized areas are very poor, many cities choose to destroy these areas to build roads. Residents are displaced and forced to move into uninvested environments, while their homes and businesses are destroyed by roads.
A 2017 study by Federal Reserve Bank of Chicago economists found that redlining practices - practices where banks discriminate against people in certain neighborhoods - have a persistent negative environmental impact, with redlining affecting home ownership rates, home values ​​and credit. scores in 2010. Since many African-Americans can not access conventional home loans, they must turn to predatory lenders (who charge high interest rates). Due to lower homeownership levels, slumlords can rent out apartments that should be owned.
Challenges
Court system
The US Department of Housing and Urban Development announced a $ 200 million settlement with the Associated Bank for redlining in Chicago and Milwaukee in May 2015. Three-year HUD observations led to complaints that banks deliberately denied mortgage applications from black and Latin suitors. The final settlement requires AB to open a branch in a non-white environment, such as HCSB.
New York Attorney General Eric Schneiderman announces a settlement with Evans Bank for $ 825,000 on September 10, 2015. Investigations have uncovered the removal of the black environment from mortgage lending maps. According to Schneiderman, of the more than 1,100 mortgage applications that banks receive between 2009 and 2012, only four are from African Americans. Following this investigation, Buffalo News reported that more banks could be investigated for the same reason in the near future. The most prominent example of such DOJ and HUD settlements has been strongly focused on community banks in large metropolitan areas, but banks in other regions have been the subject of such orders, including First United Security Bank in Thomasville, Alabama and Community State Bank. in Saginaw, Michigan.
The US Justice Department announced a $ 33 million settlement with the Hudson City Savings Bank, which serves New Jersey, New York and Pennsylvania, on September 24, 2015. The DOJ investigation for six years has proven that the company deliberately avoids giving mortgages to people Latin and African Americans and deliberately avoid expanding into minority majority communities. The Justice Department called it "the largest housing mortgage settlement in its history". As part of the settlement agreement, HCSB was forced to open a branch in a non-white community. As US Attorney General Paul Fishman explains to Emily Badger for The Washington Post, "[You] live in a black or Hispanic majority neighborhood and you want to apply for a mortgage, Hudson City Savings Bank is not the right place." Enforcement agencies cite additional evidence of discrimination in the practice of broker selection Hudson City, noting that banks receive 80 percent of mortgage applications from mortgage brokers but that brokers with whom banks work are not located in the majority of African-Americans and Hispanic regions.
Legislative Actions
In the United States, the Fair Housing Act of 1968 was passed to combat the practice. According to the Department of Housing and Urban Development "The Fair Housing Act makes it unlawful to distinguish in terms of terms, conditions or privileges of residential sales because of race or national origin. law for any person or entity whose business includes transactions related to residential real estate to discriminate against any person in providing such transactions, or under such terms or conditions of such transactions, as to race or national origin. "Equal and Equal Opportunity Equity Offices are assigned to administer and enforce this law. Anyone who suspects that their environment has been reorganized can file a complaint of housing discrimination.
The Community Reinvestment Act passed by Congress in 1977 to reduce discriminatory credit practices on low-income neighborhoods further requires banks to apply the same lending criteria in all communities. Although open redlining was made illegal in the 70s through a community reinvestment law, this practice may continue in a less obvious way. AIDS activists accuse redlining health insurance against LGBT communities in response to the AIDS crisis.
Community organization
ShoreBank, a community development bank in the South Coast of Chicago, is part of the private sector struggle against redlining. Established in 1973, ShoreBank seeks to combat racist lending practices in the Chicago-American community of Chicago by providing financial services, especially mortgage loans, to local residents. In a 1992 speech, the then presidential candidate Bill Clinton called ShoreBank "the most important bank in America." On August 20, 2010, the bank declared bankruptcy, closed by the regulator and most of its assets obtained by Urban Partnership Bank.
In the mid-1970s, community organizations, under the banner of the NPA, worked against redlining in South Austin, Illinois. One of these organizations is the SACCC (South Austin Coalition Community Council), set up to restore the South Austin neighborhood and to fight financial institutions accused of redlining. It got the attention of insurance regulators at the Illinois Insurance Department, as well as federal officials enacting anti-racial discrimination laws.
Current problem
Retail
Bricks and mortar
Retail redlining is a spatial discriminatory practice among retailers. Taxi and food delivery services may not serve certain areas, based on their ethnic and minority compositions of business (and crime allegations), rather than economic data and criteria, such as the potential for operating profits in these areas. Consequently, consumers in these areas are vulnerable to prices set by fewer retailers. They can be exploited by retailers who charge higher prices and/or offer lower goods.
Online
A 2012 study by the Wall Street Journal found that Staples, Home Depot, Rosetta Stone, and some other online retailers display different prices to customers in different locations (different from the shipping price). Staples is based on discount proximity to competitors such as OfficeMax and Office Depot. This generally results in higher prices for customers in rural areas, which on average are less wealthy than customers who see lower prices.
Liquorlining
Some service providers target low-income environments for disruptive sales. When the service is believed to have adverse effects on the community, they can be considered as a form of "reverse redlining." The term "liquor" is sometimes used to describe the high density of liquor stores in low-income and/or minority communities relative to the surrounding area. The high density of liquor stores is related to public health and crime issues, which in turn can drive supermarkets, grocery stores, and other retail outlets, contributing to the low level of economic development. Controlled for income, non-whites face concentrations of liquor stores higher than whites.
Financial services
Student loans
In December 2007, a class action lawsuit was filed against student giant Sallie Mae's loan in the United States District Court for the Connecticut District. The class alleges that Sallie Mae discriminated against African American and Hispanic student loan applicants.
The case alleges that the Sallie Mae factors employed for borrowing private student loans cause different effects on students who attend school with a higher minority population. The lawsuit also alleges that Sallie Mae failed to disclose the terms of the loan to private lending borrowers.
The lawsuit was settled in 2011. Terms of settlement including Sallie Mae agreed to contribute $ 500,000 to the United Negro College Fund and lawyers for plaintiffs receive $ 1.8 million in attorney's fees.
Credit card
Redlining credit cards is a spatial discriminatory practice among credit card issuers, by assigning different amounts of credit to different regions, based on their ethnic minority composition, not on economic criteria, such as the profitability potential of operations in these areas. Academics assess certain policies, such as credit card issuers that reduce individual credit limits with record purchases at retailers frequented by customers called "high risk", become similar to setbacks.
Insurance
Gregory D. Squires wrote in 2003 that the data show that race continues to influence the policies and practices of the insurance industry. Racial or redlining profiles have a long history in the property insurance industry in the United States. From a review of industry underwriting and marketing materials, court documents and research by government agencies, industry and community groups, and academia, it is clear that races have long been affected and continue to influence the policies and practices of the insurance industry. Home insurance agents can try to assess the ethnicity of potential customers just by phone, affect what services they offer for questions about buying a home insurance policy. This type of discrimination is called profiling linguistics. There are also concerns that arise about redlining in the auto insurance industry. The review of insurance scores based on credit proved to have unequal results by ethnic groups. The Ohio Department of Insurance in the early 21st century allows insurance providers to use maps and demographic data collection by zip code in determining insurance rates. The FHEO Investigation Director at the Department of Housing and Urban Development, Sara Pratt, wrote:
Like other forms of discrimination, the history of insurance damping begins consciously, racial discrimination is manifestly conducted openly and with significant community support in communities across the country. There is documented open discrimination in practices related to residential housing - from an assessment manual that establishes "policy" of choice articulated based on race, religion and national origin. for lending practices that only provide loans in some parts of the city or to certain borrowers, to the decision making process in loans and insurance that allows the insertion of discriminatory judgments into the final decision on both.
Mortgage
Reverse redlining occurs when a lender or insurance company specifically targets minority consumers, not denying them loans or insurance, but charging more than will be charged to white consumers residing in the same location, especially marketing most expensive and lethal loan products. These communities were largely ignored by most lenders just a few decades earlier. In the 2000s some financial institutions considered the black community suitable for subprime mortgage. Wells Fargo partners with churches in the black community, where pastors will give seminars "wealth building" in their sermons, and the bank will contribute to the church in return for each new mortgage application. The working-class blacks want to be part of the nation's home ownership trend. Rather than contributing to home ownership and community progress, the practice of lending predators through reversed redlining dismisses home equity owners who are struggling to build and deplete the wealth of these communities to enrich financial firms. The growth of subprime loans (high-cost loans to borrowers with a deficiency on their credit record) before the 2008 financial crisis, coupled with increased law enforcement activity in the region, clearly shows a surge in manipulative practices. Not all subprime loans are predatory, but almost all predatory loans are subprime. Some subprime loans certainly favor high-risk borrowers who will not be eligible for conventional primary loans. However, predatory credits charge unreasonably higher fees and fees by comparing them to risks, trapping homeowners in unreachable debts, and often burdening their homes and saving their lives.
A survey of two districts with similar income, mostly white and mostly black, found that bank branches in the black community offered subprime loans and almost no major loans. The study found that high-income blacks were almost twice as likely to end up with subprime mortgage purchases as well as low-income white people. Some credit officers refer to blacks as "mud people" and lend subprime as "ghetto loans." Lower savings rates and bank distrust, derived from redlining inheritance, can help explain why there are fewer branches in minority environments. In the early 21st century, brokers and telemarketers actively encouraged subprime mortgages. Most loans are refinancing transactions, allowing homeowners to take cash from their valuable property or pay off credit cards and other debts.
Redlining has helped maintain a separate lifestyle for blacks and whites in the United States, because discrimination often depends on the racial composition of the environment and the race of the applicant. Lending agencies like Wells Fargo have been shown to treat mortgage applicants differently when they buy homes in white environments than when buying houses in black environments.
And Immergluck writes that in 2002 small businesses in the black environment received fewer loans, even after taking into account business density, business size, industry mix, environmental income, and credit quality from local businesses.
Several state prosecutors have begun to investigate these practices, which may violate fair lending laws. The NAACP filed a class action lawsuit that imposes systematic racial discrimination by more than a dozen banks.
Environmental racism
Policies related to the deterioration and decline of the city can also act as a form of environmental racism, which in turn affects public health. The urban minority community may face environmental racism in the form of smaller, less accessible and worse-looking parks than in more affluent or white areas in some cities. It may have an indirect effect on health, because young people have fewer places to play, and adults have less chance of exercising.
Robert Wallace writes that the pattern of the AIDS epidemic during the 80s was influenced by the results of a planned "depreciation program" aimed at African-American and Hispanic communities. This is done through systematic rejection of municipal services, particularly fire protection resources, it is important to maintain an urban density and ensure community stability. Institutionalized racism affects general health care and the quality of AIDS interventions and services in minority communities. Excessive representation of minorities in various categories of diseases, including AIDS, is partly linked to environmental racism. The national response to the AIDS epidemic in minority communities was slow during the 80s and 90s, indicating insensitivity to ethnic diversity in AIDS prevention and care efforts.
Labor
Workers living in American cities find it harder to find jobs than suburban workers.
Combating redlining
Fair Housing Act
The Fair Housing Act (also known as the Civil Rights Act) of 1968 was adopted to help protect minority individuals from discriminatory practices of agencies and financial agents.
Guidelines
The Human Relations Commission of Pennsylvania adopted the guidelines on redlining. This guide shows the practices that should be prohibited in selling property to people.
Culture
The film Revolution '67 examined the redlining practices that took place in Newark, New Jersey in the 1960s.
See also
- Black flight
- Computer-assisted reporting
- Skimming cream
- Greenlining Institute
- Segregation housing
- inclusive zonation
- Price discrimination
- racial wheel
- Sundown City
- Urban updates
- Timeline of racial tension in Omaha, Nebraska
- White flight
References
Notations
- Frederick Babcock's Theory "Neighborhood Life Cycle"
Further reading
Greenwald, Carol S., Dangerous Bank for Your Wealth , Prentice-Hall 1980.
Hallahan, Kirk. "The Mortgage Redlining Controversy 1972-1975" https://web.archive.org/web/20130809022759/http://lamar.colostate.edu/~pr/redlining.pdf
Westgate, Michael and Ann Vick., Gale Force, Battle for Disclosure and Community Reinvestment , Harvard Bookstore, 2nd ed. 2011. ISBNÃ, 978-0-615-44901-2
Rothstein, Richard, "Color of Law: A Forgotten History of How Our Government Separates America", Liveright, 1st Ed. May 2017.
External links
- Inequality Mapping: Redlining in New Deal America
- File a complaint against housing discrimination
- Learn more about housing discrimination
- HOLC Maps for some US cities
- Redlining in Philadelphia. Amy Hillier, PhD
- Redlining, and Environmental Appraisal in Philadelphia
- "Color of Money": Bill Dedman received the Pulitzer Prize for Investigative Reporting in 1989 for this series of articles, which describes racial discrimination in mortgage lending in the Atlanta area.
- Crossney and Bartelt 2005. Residential Security, Risk, and Race: The Owner's Loan Loan Corporation and Mortgage Access in Two Cities. Urban Geography
- Roundtable on Redlining in Minneapolis
Source of the article : Wikipedia
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