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Definition of "Greenlining"

If a bank targets a high net worth geographical are for a marketing campaign, are they up against any regs? Can someone define "Greenlining" please?

Answer by Randy Carey: Unless your other marketing also penetrates all areas of your service area, it could be a sign of redlining.

Greenlining Definition: The business practice of investing energy, products and services in low-income, minority and disabled communities to increase profits and expand the economic pie.


Answer by Richard Insley: The term "greenlining" has become positive today, but that's not how it was used in the mid-70s leading up to the enactment of HMDA and CRA. Advocates of these laws accused lenders of redlining poor areas while simultaneously greenlining affluent neighborhoods. Both practices worked to the disadvantage of the residents of poor areas and were therefore discriminatory (overtly or by application of the effects test.)

This inquirer appears to be (and should be) concerned that targeting its marketing at a high net worth geographical area may violate some law or regulation. S/he does not state that the marketing campaign involves credit products, but we all know that other products are stepping stones to lending relationships.

I don't think it's appropriate to call greenlining redlining, but both practices can be attacked as discriminatory. Specifically, this banker should focus on the enforcement history of the Fair Housing Act, ECOA, and other (more general) laws prohibiting various types of discrimination. As Randy says, balanced marketing is the key to reducing this risk.

First published on 3/5/12

First published on 03/05/2012

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