On Election Day, the Supreme Court will hear argument in the cases of Wells Fargo v. City of Miami and Bank of America v. City of Miami. At issue is the standing of cities to sue banks for mortgage redlining and reverse redlining.
The history of redlining is well known. Banks, in concert with the housing agencies of the New Deal, drew lines around minority neighborhoods where no home mortgage loans would be made (or backed by federal agencies). Starting in the 1990s and until the 2008 crisis, subprime mortgage lenders, some of them affiliates of major banks, targeted the same minority neighborhoods for high-cost, high-risk loans. Inevitably, the same minority neighborhoods have been devastated by the recent wave of foreclosures.
Less well known is that since 2008, the overcorrection and severe tightening of mortgage loan approvals has had a hugely disparate impact on communities of color, especially in cities. Redlining is back.