Safely accessing credit is critical for many small businesses
Business owners should be aware of factors that can lead to predatory practices and how those risks can be mitigated to help ensure fair lending practices. Jason Keller and Emily Redig of Wolters Kluwer Compliance Solutions recently shared their insights on how business owners can avoid unscrupulous actors that provide short-term borrowing solutions with unreasonable terms. The insights are detailed in a feature article, “Avoiding the Pitfalls of Predatory Lending in a High-Rate Environment,” published in Corporate Compliance Insights.
Tapping their fair lending expertise, Keller and Redig focus on small businesses that may be challenged in accessing credit not only by the current environment of higher inflation and interest rates, but also by the potential for being taken advantage of by predatory lenders.
“In periods of inflation and potentially stressed economic times, lenders must be mindful of fair lending laws and regulations that are, in part, intended to prevent predatory lending,” they write. “In adhering to those laws and regulations, banks and credit unions must remain diligent in their underwriting and pricing practices to ensure dollars are lent fairly and equitably, with the borrower’s best interest in mind.”
Keller and Redig offer suggestions for business owners to help manage these challenges and to do business with regulated lenders to help avert problems. “Vigilance remains the watchword, both for lenders as well as small-business borrowers with whom they collaborate,” they note.
Founded in 2010, Corporate Compliance Insights is an independent news organization geared towards a global audience of compliance, risk and information security professionals.
