Affirmative lending refers to the practice of adjusting the demographic distribution of loan recipients to better match the demographics of area residents or depositors. This practice is mandated for federally chartered lending institutions under the Community Reinvestment Act (CRA). By improving access to credit for historically underrepresented groups, affirmative lending aims to reduce financial disparities and foster greater community investment.
A federal law that mandates financial institutions to meet the credit needs of the communities they serve, particularly focusing on low- and moderate-income neighborhoods.
Redlining is an illegal discriminatory practice in which lenders refuse to offer mortgages or other financial services to individuals based on the location of their property, often predominantly affecting communities of color. It can cause significant economic harm and contribute to the deterioration of neighborhoods.
