Offers the first history of predatory lending in the United States. It traces the origins of modern consumer lending to such older practices as salary buying and hidden interest charges. Yet, as Geisst shows, no-holds-barred loan sharking is not a thing of the past. Many current lending practices employed today would have been easily recognizable at the end of the nineteenth century.
Today's predatory lending is yesterday's loan sharking
Looking for an investment return that could exceed 500 percent annually-maybe even twice that much?
Private, unregulated lending to high-risk borrowers is the answer, or at least it was in the United States for much of the period from the Civil War to the onset of the early decades of the twentieth century. Newspapers called the practice "loan sharking" because lenders employed the same ruthlessness as the ocean's greatest predators. State and federal governments slowly adopted laws and regulations curtailing the practice, but
organized crime continued to operate much of the business. In the end, lending to high-margin investors contributed directly to the Wall Street
crash of 1929.
Loan Sharks tells us the history of predatory lending in the United States, tracing the origins of modern consumer lending to such older practices as salary buying and hidden interest charges. Yet, as Geisst shows, no-holds-barred loan sharking is not a thing of the past. Many current lending practices employed by credit card companies, payday lenders, and providers of consumer loans would have been easily recognizable at the end of the nineteenth century. Geisst demonstrates how the custom of charging high interest rates, especially to risky borrowers, despite attempts to control the practice by individual states, is still prevalent. Usury and loan sharking have not disappeared a century and a half after the predatory practices first raised public concern.
