There has been a growing body of evidence indicating race-based discrimination in small business lending. However, very little research has examined potential geographic redlining effects. Thisarticle measuress mall businesslending flowsto neighborhoodsin the Philadelphia metropolitan area. It advancespre viousw ork by measuring differential credit flowswhile accounting for variationsin the credit scoresof small firms. Black tractsrecei ve fewer loansafter accounting for firm density, firm size, industrial mix, neighborhood income, and the credit quality of local firms. The findings suggest that federal bank regulators should expand small business lending data to include racial characteristics and application information, in part to help identify potentially discriminating lenders for further investigation. Also, Community Reinvestment Act regulations should pay more attention to the distribution of small business loans, by both race and income of neighborhood.


Original Citation: Immergluck, Dan. "Redlining Redux: Black Neighborhoods, Black-Owned Firms, and the Regulatory Cold Shoulder." Urban Affairs Review 38, no. 1 (2002): 22-41.