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The strategy focused on the Federal Home Loan Bank Board (FHLBB), which oversaw S&L's in cities all over the country.
These actions addressed the short-term issues of neighborhood decline.Although informal discrimination and segregation had existed in the United States, the specific practice called "redlining" began with the National Housing Act of 1934, which established the Federal Housing Administration (FHA).Racial segregation and discrimination against minorities and minority communities pre-existed this policy.In the United States, redlining is the practice of denying services, either directly or through selectively raising prices, to residents of certain areas based on the racial or ethnic composition of those areas.While the best known examples of redlining have involved denial of financial services such as banking or insurance, Reverse redlining occurs when a lender or insurer targets particular neighborhoods that are predominantly nonwhite, not to deny residents loans or insurance, but rather to charge them more than in a non-redlined neighborhood where there is more competition.In Massachusetts, organizers allied with NPA confronted a unique situation.
Over 90% of home mortgages were held by state-chartered savings banks.
This organization, led by Chicago housewife Gale Cincotta and Shel Trapp, a professional community organizer, targeted The Federal Home Loan Bank Board, the governing authority over federally chartered Savings & Loan institutions (S&L) that held at that time the bulk of the country's home mortgages.
NPA embarked on an effort to build a national coalition of urban community organizations to pass a national disclosure regulation or law to require banks to reveal their lending patterns.
Neighborhood leaders began to learn that these issues and conditions were symptoms of a disinvestment that was the true, though hidden, underlying cause of these problems.
They changed their strategy as more data was gathered.
FHA appraisal manuals instructed banks to steer clear of areas with "inharmonious racial groups", and recommended that municipalities enact racially restrictive zoning ordinances.