A practice in which a company refuses to
market its products in a certain area because it is disproportionately poor, has a high rate of
default, and/or has a large minority population. Examples of products where a company may practice red-lining are
health insurance and
mortgages. Red-lining is illegal because these products should be offered based on individual
creditworthiness. Those who support the illegality of red-lining argue that it promotes equality between races and classes, while critics contend that it leads to needless distortions in the
market. See also:
Fair Housing Act of 1968,
Community Reinvestment Act.