Redlining is best defined as denying loans or insurance based on neighborhood criteria.

• A. Denying loans based on an individual's credit history
• B. Denying loans or insurance based on race
• C. Denying loans or insurance based on neighborhood characteristics
• D. Denying loans or insurance based on neighborhood criteria

Answer: (D)

Redlining centers on denying loans or insurance because of the location of the property, using the neighborhood as the basis for eligibility rather than the individual’s own qualifications. The option that describes decisions made based on neighborhood criteria best captures that geographic-based policy, where the rule is applied to an area rather than to a particular applicant's credit history. Denying based on an individual's credit history reflects standard underwriting, not redlining. Denying based on race points to discrimination of a protected class, which is illegal, and while redlining has racial implications in practice, the defining feature here is the neighborhood-based decision rule. Denying based on neighborhood characteristics could be interpreted as evaluating the area itself, but “criteria” emphasizes the policy applied to the neighborhood as the basis for denial.