The 1968 Fair Housing Act and the 1977 Community Reinvestment Act are federal laws which prohibit home lending discrimination based on an applicant’s race, sex, religion, family status or disability. These laws also make it illegal for banks to impose predatory interest rates or fees on borrowers. Redlining is an illegal practice in which neighborhoods, often populated by minorities, are denied loans for buying and renovating homes. Housing discrimination studies show redlining is a significant factor behind the wealth disparity between blacks and whites today, so much so that black families have lost at least $212,000 in personal wealth over the last 40 years because their home was redlined. Advocates claim that redlining is still occurring today – only in more subtle ways. Lenders now use proprietary algorithms involving credit scores and educational levels that have a discriminatory impact on borrowers of color. Recent independent analysis also found that the greater the number of African Americans or Latinos in a neighborhood, the more likely a loan application will be rejected – even after accounting for income and other factors.

Proposed Legislation: H.R.8039 - Examining Educational Redlining in Lending Act (116th Congress)
Prospective Sponsor: Rep. Joyce Beatty (OH)