Keywords

small business finance, entrepreneurial consumer behavior, discrimination in lending

Abstract

For more than a decade we, as academic researchers, have investigated the experience of small business customers seeking financial products for their businesses. We have employed a variety of research methodologies to explore the “lived” experiences of small business owners seeking financing, including matched-paired mystery shopping, video ethnography, depth-interviews, controlled experiments, and surveys. From this research, we show that with limited financial sophistication, entrepreneurial small-business consumers approach the financial marketplace much more like retail financial consumers than sophisticated, corporate customers. Furthermore, we find that the customer service received by these small business customers seeking small business bank loan products is consistently poor and that the actual treatment of racial minority and women-owned small business banking customers is significantly inferior in critical ways. These findings suggest that the playing field for women and minority-owned small businesses is not level and the business and personal outcomes for these individuals and for the economy as a whole is suboptimal.

Original Publication Citation

“Addressing the Gap in Consumer Protection for Small Business Consumers Through a Multiple Method Research Program,” Invited Presenter, CFPB Symposium: Section 1071 of the Dodd-Frank Act, Consumer Financial Protection Bureau, Washington D.C., November 6, 2019. (https://www.consumerfinance.gov/about-us/events/archive-pastevents/cfpb-symposium-section-1071-dodd-frank-act/)

Document Type

Conference Paper

Publication Date

2019-11-06

Publisher

Consumer Financial Protection Bureau

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Associate Professor

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