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Illegal discrimination in making loans, insurance coverage, or other financial services available to people or property in certain areas because of poor economic conditions, high levels of fraudulent transaction, or frequent defaults.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved