Answered

What is predatory lending?
when banks treat borrowers unfairly to make larger profits
when banks refuse to give loans to people who qualify for them
when banks agree to give people loans but then refuse to provide the money
when banks don't make a large profit on the loans they provide to borrowers



Answer :

GinnyAnswer

Final answer:

Predatory lending involves banks exploiting borrowers with unfair loan terms, contributing to financial instability and crises.


Explanation:

Predatory lending refers to when banks exploit borrowers by offering loans with unfair terms, often to individuals who may not be able to repay them. This practice can lead to financial hardship for borrowers and destabilize the financial system.

During the 2007-2008 financial crisis, banks engaged in predatory lending by providing loans to high-risk borrowers, contributing to the collapse of the housing market. This behavior was exemplified by selling risky loans as secure investments, ultimately harming both borrowers and the economy.

Legislation such as the Fair Housing Act aimed to address discriminatory lending practices like redlining, which unfairly targeted minority communities, highlighting the importance of regulations to prevent predatory lending in the financial sector.


Learn more about Predatory lending practices in the banking sector here:

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