What term describes the refusal of a lender to loan in certain minority neighborhoods?

Redlining refers to the practice where lenders refuse to provide mortgage loans or insurance to individuals in certain neighborhoods, often based on the racial or ethnic composition of those areas. This term originated from the practice of marking areas on a map in red to indicate high-risk zones for lending, typically corresponding to neighborhoods inhabited predominantly by minority groups.

This discriminatory practice has historically led to systemic inequality, limiting access to homeownership and financial resources for residents in those communities. As a result, redlining has significant impacts on wealth accumulation and socioeconomic status among affected populations.

The other terms mentioned do not accurately describe this specific lending practice. Steering relates to guiding homebuyers toward or away from certain neighborhoods based on prejudiced views, blockbusting involves inducing panic selling in a neighborhood to facilitate racial turnover, and territory allocation refers to the division of markets, which does not specifically address the discriminatory lending practices associated with redlining.