Key Terms:

Redlining – Discriminatory lending practices had deep historical roots. The term “redlining,” which refers to the practice of designating certain lower-income or minority neighborhoods as ineligible for credit, appears to have originated in 1935, when the Federal Home Loan Bank Board asked the Home Owners’ Loan Corporation to create “residential security maps” for 239 cities that would indicate the level of security for real estate investments in each surveyed city.¹ The resulting maps designated four categories of lending and investment risk, each with a letter and color designation. Type “D” areas, those considered to be the riskiest for lending and which included many neighborhoods with predominantly African-American populations, were color-coded red on the maps–hence the term “redlining” (Federal Home Loan Bank Board, 1937). Private lenders reportedly constructed similar maps that were used to determine credit availability and terms. The 1961 Report on Housing by the U.S. Commission on Civil Rights reported practices that included requiring high down payments and rapid amortization schedules for African-American borrowers as well as blanket refusals to lend in particular areas.  “The Community Reinvestment Act: Its Evolution and New Challenges”

Racial Wealth Gap – Wealth is defined as 1. Abundance of valuable material possessions; 2. Abundant supply; 3a. all property that has a money value or an exchangeable value 3b. all material objects that have economic utility Merrian-Webster .  In the United States, the average Black and Hispanic or Latino households earn about half as much as the average White household and own only about 15 to 20 percent as much net wealth. “Wealth Inequality and the Racial Wealth Gap”