What practice involves refusing to make loans in minority neighborhoods?

Redlining is the practice that involves systematically refusing to make loans or providing insurance in specific neighborhoods, particularly those predominantly inhabited by minority groups. This practice originated in the 1930s when lenders began using red ink to outline areas on maps, indicating neighborhoods deemed too risky for investment.

By refusing to lend in these areas, financial institutions effectively restricted access to credit and economic opportunity for residents, contributing to long-term financial instability and disinvestment in those communities. This discriminatory practice has had far-reaching effects, including the reinforcement of racial segregation and wealth disparities.

In contrast, the other terms relate to broader issues of social inequality or unfair practices but do not specifically address the banking practices and policies that categorize neighborhoods for potential lending or investment, making redlining the most accurate term in this context.