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NewsFlash: February 28, 2008

Economic inequality revives redlining

The development of a two-tiered system of financial services, driven by the rising economic inequality in the United States, is ushering in a new era of de facto redlining, according to a new report, Do Subprime Loans Create Subprime Cities?, released today by the Economic Policy Institute.

The report’s author, Gregory D. Squires, a George Washington University sociologist, contends that increasing economic inequality and diminishing access to conventional financial services have become inextricably linked.

“Rising inequality of income and wealth in the United States has intensified the segregation of metropolitan areas by class, with race and ethnic segregation continuing at high levels,” said Squires. “For residents of these increasingly segregated low-income and minority communities, the range of opportunities, including access to financial services, becomes more and more limited.”

For the news release (PDF), click HERE.

For the briefing paper, click HERE.

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