This has the potential to get ugly and waste more than a little of your time. Because you know this person is abusive and manipulative and you're preparing to butt heads over a credit application (and possibly the handling of existing credits), now's a good time for a Reg. B review. You don't want to stumble into an unexpected Reg. B issue that could compromise your position.
Start with the protected characteristics and walk through the rules for taking applications, making credit decisions, and providing notifications.
One of those protected characteristics you never think about is good faith exercise of any right under the Consumer Credit Protection Act. The classic "exercise of rights" training example deals with cancellation or restriction of a credit card (or other revolving consumer credit) because the customer has been a nuisance -- including frequent use/abuse of the billing error resolution right. Because billing error resolution is a CCPA right, what you might consider adverse action becomes illegal discrimination.
That particular right isn't relevant to your upcoming confrontation, but the CCPA establishes many types of consumer protection. Now's a good time to take a close look at all of the assorted CCPA rights and think what might be thrown at you by this problem customer.