Denying a loan app from a current abusive customer

We have a customer who has 3 loans with us. The first one is by himself. The other two are joint with his girlfriend. They both have good credit. Since these have been made, only the girlfriend has come into the bank. The problem is that she is verbally abusive to our employees. She also appears to be very manipulative. She has somehow also gotten local churches to make the payment on their mortgage loan in recent months. She receives disability when it doesn't appear that she's disabled. The bottom line is she's just an all around foul person that none of our employees want to deal with.

The last time she was in the bank she said that she wants to apply for a car loan once she gets her tax return money in late January or early February. We really don't want anything to do with her. I've read another post where someone recommended getting a restraining order. With them already having loans with our bank, I don't see that as an option in our situation. I'm thinking we just let her apply then send her a denial. Does that sound like a reasonable plan? How would you word the denial reason?

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.

This is a sticky situation because she sounds like the kind of person that may do everything she can to make your life hard if she believes you are on her "nasty list". However, you don't have to make a loan to rude or abusive people. That's not a protected class.

Make sure that the bank fully documents each and every time that she has become abusive to staff. That will make your response to the regulators inquiry a lot easier.

What about when you have a consumer who does not have any loans with us, but has been verbally abusive to our staff on the deposit side and now wants to get a loan? What is the reason for denying? Can you state prior bank experience even though it was not on the loan side?

Sure you can. You can tell them it is because they always wear a blue shirt if you want to, as long as it is not based on a prohibited basis.

I would consider closing the deposit account. Why let this customer treat your staff badly?