A chronological account of money lending and loan sharking with an emphasis on practices in the United States in the past 200 years.
In this scholarly history of predatory lending and usury, Geisst (Economics and Finance/Manhattan Coll.; Beggar Thy Neighbor: A History of Usury and Debt, 2013, etc.), who has written extensively about these issues, discusses lending in a sweeping way rather than just emphasizing illegally or immorally high interest rates. The chronology is sometimes difficult to follow, partly because of the massive (and impressive) amount of detail and partly because of mostly dense prose. At times, the author’s argument is difficult to keep straight, as he states repeatedly that usurious limits rightly vary according to historical era, who is lending and who is borrowing, and unpredictable shifts by Congress, executive branch regulatory agencies, and the courts. In a postscript, Geisst states that it’s doubtful agreement can be reached about the intellectual underpinnings of a standard usury ceiling. As a result, writes the author, the debate over what constitutes predatory lending “becomes fruitless and never-ending.” At certain junctures, the author refers to contemporary payday lending, an eternally hot-button issue because of its impact on low-income borrowers, especially those who cannot read or speak English well. However, because the bulk of the narrative stops in the 1930s, its instructiveness about modern payday lending is limited. Geisst is most interesting when he connects predatory lending to other social ills, such as alcoholism. Supporters of Prohibition successfully argued to policymakers that individuals fairly labeled alcoholics tended to become easy prey for predatory lenders because their inebriation made individual and family management of money extremely difficult. “Loan sharking in its many forms,” writes the author, “has caused stock market panics, structural banking problems, and often has impeded economic recovery after severe economic downturns.”
Mostly for scholars of economic history and highly motivated lay readers.