Finance
A Virginia lender who discriminates in lending based on the racial composition of a neighborhood is engaging in:
ASteering
BBlockbusting
CRedlining✓ Correct
DPredatory lending
Explanation
Redlining occurs when a lender refuses to make loans or charges different terms based on the racial or ethnic composition of a neighborhood, violating ECOA and the Fair Housing Act.
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Key Terms to Know
Redlining
An illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
Fair Housing ActFederal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
SteeringAn illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.
BlockbustingAn illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.
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