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Discrimination and Credit

Discrimination in the extension of credit is volatile issue in the United States. Although federal government efforts to end such discrimination have been pursued for two decades, critics contend that much work is still required.

Discrimination in lending is a part of the larger problem of housing discrimination. Discrimination exists in the United States with respect to a variety of factors. The most publicized form of discrimination is that associated with racial and ethnic background. Such discrimination is also based at times on age, sexual preference, behavior, and other factors. The means by which discrimination is applied to lending vary. Overt refusal to lend money to an individual because of racial or ethnic background is not only illegal in the United States, it is also relatively rare. Such legal prohibitions are often circumvented in a number of ways, however, such as a failure to offer certain loan programs to certain individuals, and rejection on the basis of other factors that appear unrelated to racial or ethnic background, but which, in fact, may be contrived, and may not be applied equally to white applicants. Although illegal, this practice often results in the denial of funds to members of racial and ethnic minorities, and even to neighborhoods that are predominantly occupied by members of racial and ethnic minorities. This latter practice is known as "redlining."

In 1977, the Community Redevelopment Act (CRA) became law. The CRA deals with two of the specific issues of overriding interest in the equal opportunity area--equal access to housing, and equal access to credit. The CRA was, in 1977, the latest in a series of federal laws designed to attack the problems of unequal access to credit that were confronting some segments of the American population. The CRA was related to these other laws, but the act and its provisions were specifically designed to deal with the problems related to mortgage...

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Discrimination and Credit. (1969, December 31). In LotsofEssays.com. Retrieved 05:39, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1687101.html