What is redlining and why is it prohibited?

Redlining is the discriminatory practice of denying or limiting financial services, insurance, or mortgage lending to residents of specific geographic areas based on the racial or ethnic composition of those neighborhoods. The term originated from maps where lenders literally drew red lines around minority neighborhoods deemed too risky for investment. Redlining violates the Fair Housing Act, the Equal Credit Opportunity Act, and the Community Reinvestment Act.