Legal Definition of ”Redlining”

In United Cos. Corp. v. Sargeant, 20 F. Supp. 2d 192 (D. Mass. 1998), the United States District Court defined "redlining" as the practice of denying the extension of credit to specific geographic areas due to the income, race or ethnicity of its residents.

The term was derived from the actual practice of drawing a red line around certain areas in which credit would be denied.

Reverse redlining is the practice of extending credit on unfair terms to those same communities. Id. at 203, n.5.