Keywords

small business lending, entrepreneurial consumers, regulatory protection gaps

Abstract

With limited financial sophistication, entrepreneurial consumers approach the financial marketplace more like retail financial consumers than business customers. However, the assumption of both legislators and regulators is that business-borrowers are more financially savvy than consumer-borrowers, and thus do not require as broad-reaching protections. This gap between marketplace policy protections and the lived reality of the vast majority of small business entrepreneurs sets the stage for entrepreneurial consumers to fall through the regulatory cracks and sets the stage for possible exploitation and abuse. This situation is potentially exacerbated for minority entrepreneurs who belong to protected classes that are generally more vulnerable to exploitation in the marketplace including the small business lending marketplace. In this paper, we highlight the current state of this policy gap in the marketplace relative to minority entrepreneurial consumers and present a matched-paired mystery shopping study that demonstrates the critical need for reliable, primary data to inform regulatory agencies as they work to implement available protections to ensure equal access to credit within the small business lending marketplace.

Original Publication Citation

“Detecting Discrimination in Small Business Lending,” (2018) with Sterling A. Bone and Jerome D. Williams, Stella Adams, Ali Lederer, and Paul Lubin Winter AMA Educators’ Conference, New Orleans.

Document Type

Conference Paper

Publication Date

2018

Publisher

Jon M. Huntsman School of Business

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Associate Professor

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