What is prohibited when soliciting or entering into a contract with a borrower regarding obtaining loans?

Charging fees without performance is prohibited when soliciting or entering into a contract with a borrower regarding obtaining loans because it is considered unethical and may violate various consumer protection laws. This practice leads to borrowers being charged for services that were not rendered, placing them at a financial disadvantage. Transparency and fair practices are core principles in lending, ensuring that borrowers are not misled about fees or the services they will receive in return.

In the lending industry, companies must provide clear disclosures about fees and services provided. If a lender charges a fee, there must be a demonstrable service rendered in exchange for that fee, fostering trust and integrity in the lending process. This requirement protects borrowers from predatory practices and ensures they receive valuable services for any fees charged. Therefore, charging fees without performance undermines the fundamental trust that should exist between borrowers and lenders.