Infro, Inc., is a major lender licensed to lend only in Delaware. Infro tracks the payment history of its customers and finds that customers in Sussex County perform far below customers in the other counties. Assume that the county which is heavily into farming and low-paying industrial jobs is 25 percent African-American and has a 40 percent population of legal and illegal immigrants. Infro finds that while it is profitable overall, it is losing money on the Sussex County loans. Further research reveals that Sussex County is one of the poorest-performing customer bases nationwide and that most companies doing business in the county are losing money. The board of directors decides not to make any more loans in Sussex County. Which of the following is true?
A) Before Infro implements its decision, it must get permission from the FTC to do so.
B) If Infro goes through with its decision, it is engaging in redlining which is illegal.
C) If Infro goes through with its decision, it is engaging in reverse redlining which is illegal.
D) Infro, as a private company, is free to make business decisions that are advantageous to the company and has done nothing wrong.
E) If Infro goes through with its decision, it is engaging in liquorlining which is legal.

Question

Quizplus · Accepted Answer

It has been established that the practice of redlining, that is, refusing to make loans at all in certain areas where property values are low, can discriminate on the basis of race in granting mortgage credit.