A lender who makes insurance a condition for loan approval may be guilty of what practice?

A lender who requires insurance as a condition for loan approval may be engaging in coercion. This practice can create undue pressure on borrowers to obtain insurance through specific channels or providers that may not offer the best terms. Coercion occurs when someone is forced to take certain actions against their will due to the influence or pressure from another party. In the context of lending, it can manifest when borrowers feel they have no choice but to comply with the lender's terms, thereby compromising their autonomy in the decision-making process. This practice could be viewed as manipulative and unethical, leading to potential harm to the borrower.

While other options like discrimination, fraud, and violation may refer to other unethical or illegal practices within lending and insurance, they do not specifically address the scenario of a lender making insurance a mandatory condition for loan approval as strongly as coercion does. Discrimination relates more to unfair treatment based on specific characteristics, fraud involves deceit for personal gain, and violation typically refers to breaching laws or regulations rather than the exertion of pressure.