Redlining is best described as geographic discrimination in lending. Which statement best defines it?

• A. It involves geographic discrimination in lending
• B. It refers to phishing scams
• C. It is a form of underpricing insurance
• D. It describes bias in underwriting not tied to geography

Answer: (A)

Redlining is about geographic discrimination in lending. It describes a practice where lenders draw maps and systematically deny or restrict credit in certain neighborhoods, often those with higher minority populations, regardless of an individual borrower’s creditworthiness or income. This location-based exclusion lowers investment, depresses property values, and reinforces segregation over time. Phishing scams are unrelated fraud schemes, underpricing insurance is about charging too little for coverage, and bias in underwriting not tied to geography would target factors other than location—so none of these capture the essence of redlining like the geographic discrimination aspect does.