Housing Department’s Redlining Retreat Grants Lenders a Reprieve

The US government is retreating from its mission of ensuring banks and other big financial companies don’t discriminate against neighborhoods with high populations of racial minorities when making home loans.

The practice of redlining — denying financial services to entire neighborhoods — has for years been a key focus of the Department of Housing and Urban Development, whose lawyers have fought to enforce fair-housing laws that ban it. But a recent internal memo, obtained by Bloomberg News, says HUD investigators should no longer consider how financial firms behave in particular neighborhoods, focusing instead on how the companies treat individuals. The shift nearly eliminates the chances the department will pursue ...