Final answer:
The Home Mortgage Disclosure Act (HMDA) was introduced to address lending discrimination in low-and moderate-income neighborhoods. This act came in response to discriminatory practices such as redlining that historically prevented minorities from obtaining mortgages.
Step-by-step explanation:
The federal lending act introduced to combat lending discrimination in low-and moderate-income neighborhoods is the Home Mortgage Disclosure Act (HMDA). The HMDA was an important legislative measure to ensure fairness and transparency in the lending process, particularly in response to the practice of redlining, a discriminatory practice where services (such as banking, insurance, access to jobs, and even supermarkets) are denied or restricted to certain areas, often based on racial or ethnic composition. Redlining historically prevented minority communities from gaining access to mortgages and investing in homeownership, which exacerbated segregation and economic disparities.
Laws like the Fair Housing Act of 1968 aimed to outlaw discriminatory practices in housing such as redlining. However, the damage done by redlining and other discriminatory practices was profound and left lasting impacts on neighborhoods, prompting the need for further legal protections against economic and racial discrimination in lending. The HMDA, along with other regulatory measures, developed to counteract the systemic inequality perpetuated by these unfair practices.