Justice Department to increase enforcement of redlining
The Department of Justice on Friday announced a cross-government effort to ramp up investigations and prosecutions against redlining — a practice designed to keep racial minorities out of certain neighborhoods.
The big picture: Friday's announcement marks the first major expansion of redlining investigations since the Obama administration, per AP.
- The practice of redlining occurs when banks refuse to underwrite mortgages and loans and insurance companies refuse coverage based on race and ethnicity, Axios previously reported.
- Despite laws to counter redlining, the practice has persisted across the country and its effects have reverberated nationwide.
- Homes found in historically redlined neighborhoods are still worth less than homes found in non-redlined communities, according to AP.
Driving the news: The Justice Department, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency announced a new case against Trustmark Bank for its treatment of Black and Hispanic borrowers in Memphis, Tennessee.
What they're saying: "Lending discrimination runs counter to fundamental promises of our economic system," Attorney General Merrick Garland said Friday.
- "When people are denied credit simply because of their race or national origin, their ability to share in our nation’s prosperity is all but eliminated."
- "We will spare no resource to ensure that federal fair lending laws are vigorously enforced and that financial institutions provide equal opportunity for every American to obtain credit," Garland said.
Go deeper: Formerly redlined areas now are more often urban heat islands