|
Track: Banking
Forrestt Severtson
Spatial Solutions
1013 Lake Union Hill Way
Alpharetta, GA 30201
Telephone: 770-740-6353
Fax: none listed
E-mail: fsevertson@delphi.com
Measuring Redlining with Spatial Statistics and GIS
Keywords: Redlining, spatial statistics, Home Mortgage Disclosure Act (HMDA), Community Reinvestment Act (CRA), compliance, discrimination, disparate impact. The federal government has attempted to eliminate redlining, illegal discrimination (disparate impact) against persons in identifiable geographic regions, through the Home Mortgage Disclosure Act (HMDA) and the Community Reinvestment Act (CRA). These regulations require bank compliance officers to ensure that all persons in their service areas are equitably served. In spite of this legislation, claims of redlining still occur, accompanied by statistically based arguments purporting to support these claims. However, none of these statistical arguments have adequately addressed the spatial component implicit in any redlining situation. The author has developed a spatially based statistic that fully incorporates the spatial elements of a financial portfolio as well as the economic elements (risk and demand) that go into a decision about whether or not
to grant financial services such as mortgages, credit, or insurance. This spatial statistical approach to measuring the presence or absence of redlining in a financial portfolio is essentially non parametric in nature, uses polygons similar to areas of dominant influence (ADI), and reports the likelihood of redlining being present in a portfolio. Software: The software to perform this analysis uses MapObjects.
|
|
