At the beginning of the twentieth century in America, small household loans were both commonplace and a source of general concern. Social reformers fought to limit the economic and social impact of small lenders they decried as loan sharks; reputable businesses steered clear of sales credit because of the questionable consumers they worried it would attract. By the 1970s, credit in America had been reimagined as a legitimate tool of household finance that was understood to have broad social and economic benefits. This transformation in the moral economy of credit accompanied a revolution in lending technologies and the regulatory treatment of credit. Ultimately, these changes allowed American households to amass unprecedented debt – debt that eventually precipitated the worst financial crisis of postwar America. To understand the origins of that crisis, we need to understand not just the shifting habits of consumers but also what happened to lenders as the public moved from opposing credit to embracing it. This book traces how that transformation occurred.

Research into the origins of America's enthusiasm for credit has primarily focused on household demand. Historians have emphasized the role of credit in providing financial discipline, the ability to meet real material needs during economic downturn, and the role of credit in meeting goals of social aspiration. Behavioral economists have noted a pervasive tendency of consumers to favor near-term consumption. Because credit allows us to move consumption forward in time, humans seem to be hardwired to want to borrow. Sociologists have argued that the flattening of real wages and the decline of welfare programs in the 1970s drove households to rely more on credit for their everyday needs. Whatever the precise mixture of causes, household demand for credit seemingly has always been high. Rare indeed are lender complaints about a lack of consumer demand for credit. Less scholarly attention has been applied to how that demand has historically been met: on the supply of credit, companies that competed to provide it, regulators who wrote the rules for the sector, and a range of nongovernmental groups that came to see access to consumer credit as a means to achieve their own societal goals. This does not imply that the reasons for consumer borrowing were unimportant. Lenders and their supporters have always told stories about why consumers borrow.