Which statement best describes the historical practice of redlining?

• A. Redlining targeted neighborhoods based on race or ethnicity for denial or limitation of services
• B. Redlining was a temporary policy with no long-term effects
• C. Redlining only affected commercial districts
• D. Redlining was never used to influence lending

Answer: (A)

Redlining refers to a discriminatory pattern in which lenders and insurers systematically deny or limit financial services in neighborhoods mainly because of the racial or ethnic makeup of those areas. In the mid-20th century, maps and practices labeled minority communities as high risk, which meant fewer or no mortgage loans, insurance, or investment in those places. This wasn’t a temporary measure with no lasting impact; it created a cycle of disinvestment that kept properties underpriced, reduced homeownership, and widened wealth gaps for generations. Although later laws and enforcement sought to curb such discrimination, the historical practice shows how lenders used location-based judgments to exclude people from the financial market. The other statements miss the mark because redlining did involve denying or limiting lending based on race, it affected residential areas (not just commercial districts), and it was indeed used to influence lending decisions.