The Federal Home Loan Bank Board, Redlining, and the National Proliferation of Racial Lending Discrimination, 1921-1950

By utilizing the annual reports of the Federal Home Loan Bank Board (FHLBB) and its monthly journal, the Federal Home Loan Bank Review, this essay argues that the incorporation of the Home Owners' Loan Corporation's appraisal scheme had several detrimental consequences. By mandating their appraisal analysis as a prerequisite for membership into the federal banking system, the FHLBB established unified national lending standards designed to evaluate neighborhood demographics as a factor far exceeding the condition of the appraised property itself. With the inclusion of these scientific appraisal standards into their uniform lending policies, FHLBB officials rated entire residential communities as hazardous bank investments whenever they were inhabited by undesirable occupants. Ultimately, the standardized lending policies of the FHLBB systematically disadvantaged low-income and minority city-dwelling residents from obtaining mortgage financing, and by midcentury they exacerbated the disproportionately substandard urban housing conditions endured by nonwhites in the United States.