Redlining Returning? A Renewed Health Threat to Low-Income Communities

By John W. Robitscher, CEO, National Association of Chronic Disease Directors and Frank Woodruff, Executive Director of the National Alliance of Community Economic Development Associations

You have probably heard the term "redlining" in the news lately. It refers to the days when government agencies and banks would literally use a red pen on a map to mark off neighborhoods. Within these red lines, banks would avoid providing loans, investments, and services based on race, poverty, and religion.

You have also probably heard that health outcomes have more to do with zip code than genetic code. Where people live, learn, work, and play has significant impact on the quality and length of life. The ongoing ripple effect of redlining is a core reason we continue to see dramatic place-based health disparities. There is a direct relationship between the historical patterns of discrimination caused by redlining and disease and mortality rates, resulting in health “hot spots,” and community-based health challenges that still exist today.

Now redlining could be making a comeback due to attacks on the Community Reinvestment Act, raising alarms about the health impacts on low- and moderate-income communities.

Congress passed the Community Reinvestment Act (CRA) in 1977 to put an end to decades of redlining by requiring banks to make loans and investments anywhere they take deposits. Banks undergo examinations to assess how well they serve low- and moderate-income areas in their footprint. A bad exam can prevent banks from merging, acquiring other banks, and offering new lending products.

CRA is one of our society’s few tools to compel capital, investments, and essential financial services in places the private sector would otherwise choose to abandon.

However, a current proposal by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation would gut the Community Reinvestment Act, and starve low- and moderate-income neighborhoods of private sector resources that build healthy communities.

Why should the health community care about banking policy?

Imagine a chronically ill sick patient. Now, imagine that patient without access to a bank account or a home they can afford. Imagine the only place they can go to get a loan or financial advice is a payday lender charging 599% interest. Imagine community services in their neighborhood shrinking even further if the current proposal is enacted. Put simply, gutting CRA will perpetuate health disparities and make communities sicker.

Public health and health care professionals have increased their understanding of the social determinants of health and begun partnering with community developers around our shared mission of improving health outcomes among low- and moderate-income people and places.  That shared mission needs to extend beyond local programs and projects to public policy decisions such as the proposed CRA rule changes.

This time, community developers are not asking for wrap-around services for low-income senior citizen development, a mobile clinic in an abandoned neighborhood, support for a healthy food market, or money for a playground near a public housing development. They are asking the health community to fight proposed changes to CRA that could starve low-and moderate-income communities of bank loans, investment, and services.

The proposed rule would weaken CRA as a force to improve place-based health outcomes in several ways.

First, it dramatically expands the bank activities eligible for CRA credit, directing money away from affordable housing, workforce development, small business development, and other community activities that fight redlining and advance prosperity.

Second, the proposal de-emphasizes the mandate for banks to serve community-identified needs in favor of requiring banks to simply meet an overly simplistic investment ratio. It undermines a core strength of CRA – the encouragement of bank to engage with community development organizations, municipal officials, and public health officials to understand and better serve community needs.

And here’s the worst part. Banks would need to meet a benchmark level of investments in only a “significant portion” of its assessment areas in order to receive a satisfactory or outstanding rating, defined as something more than 50 percent.

A bank could choose half of its assessment areas to serve, ignore the rest, and still receive an outstanding rating.

Allowing a financial institution to serve anything less than 100 percent of its assessment areas would legalize redlining—and that is not an exaggeration. It would bring us back to an era of red lines around poor neighborhoods and neighborhoods of color. Except this time, it’s worse, because history has shown us the consequences of starving neighborhoods of capital, and yet we’re choosing to allow redlining anyway.

Why should the health community care about banking policy? Because history shows us that banking policy can stabilize communities or send them into a tailspin, reduce health disparities or widen the gap.

Our nation's community developers and chronic disease directors are coming together on this in an unprecedented way. We think you should too. The official comment period for this CRA proposal ends April 8. Find more information at

Thank you to Shelterforce magazine for their help in developing this piece.