Redlining Cities: How Banks Color Community Development

Headline-grabbing crises in the American banking and financial system vie with lurid coverage of urban decline as staples of our domestic news. The general public essentially perceives these as two separate areas of crisis. But they are interconnected, as this examination of the banking practice known as redlining reveals. The health of America's cities depends on both public and private investment. The 1980s witnessed a decline in federal funds for cities and community development, forcing local governments and community organizations to seek private financing (developers, corporations, banks, and foundations) for community development projects. At the same time, government deregulation of the banking industry led to an orgy of speculation that destabilized both the industry and urban neighborhoods. The savings-and-loan scandal, as well as the collapse and merger of many commercial banks, have recently put the arcane and complex topic of banking industry reform on the front pages and on the national agenda. Often lost in the crossfire between different sectors of