It’s important to keep in mind that the dip in the press’s use of the term “predatory lending” that began in 2004 coincides almost exactly with a tremendous spike—a veritable onslaught—of actual predatory lending in the real world. This is part of the heartbreaking press failure in this economic crisis that we have documented previously (see “Power Problem,” CJR, May/June 2009).
By contrast, “subprime” started late but took off fast, with hits reaching more than seven hundred in 1998, according to Factiva, when the market enjoyed an early boomlet (along with some pushback from the government that we’ll get to in a minute). While “subprime” generally mirrored the track of “predatory” for the first few years of the current decade—if on a slightly larger scale—it began to diverge mid-decade and then shot up tremendously, to more than 75,000 by 2007, when it peaked with the onset of the current crisis. That year, and continuing through 2008, hits for “subprime” were on the order of seventy or eighty times more frequent than hits for “predatory lending.”
Predatory lending is a subset of the subprime market, and so one might argue that we shouldn’t expect “predatory” to be used as often as “subprime.” But not as often is one thing, and eighty times less is quite another. Also, such an argument ignores the fact that the problem here—and thus the news—is the predatory aspect of subprime. Anyone who didn’t understand that didn’t understand the story.
As the press should have known, but apparently didn’t, the subprime industry has always been in large part the domain of sleazebags and became only more so over time. The problem, as consumer advocates long argued, mostly in vain, was not that higher-risk borrowers were getting loans, but that they were getting bad loans. So not only did the shift to the word “subprime” remove all reference to aggressor and victim—professional and civilian, con man and conned—it stigmatized an entire community of borrowers. To the extent that subprime comes to be seen as bad, subprime borrowers are bad. Lenders? Just doing their job.
Thus the significance of this linguistic shift is major. Here’s the thing: the roots of the current crisis lie in the disastrous expansion of the subprime market, which ballooned in the 1990s and 2000s—thanks, in large part, to Wall Street, which was looking for more mortgage-backed securities to stoke a blazing market, and to corrosive deregulation. Though it makes little sense, a recurring press mantra has it that borrowers, as much as anyone else, are to blame. But blaming borrowers in a systemic way ignores the structure of the subprime market and the extent to which lenders had power and borrowers did not.
There is a mitigating factor here: the phrase “predatory lending” has its own problems. Such rhetorical aggression is always a gamble, because while it drives its point solidly home it also invites responses ranging from skepticism to outright attack. (Except from true believers, of course, but they aren’t
the ones who need convincing.) So while we don’t have a problem with fighting words, the fact is that such words—even, and this is key, when those words are highly defensible—only stand up with solid definitions behind them. And no one can agree on precisely what predatory lending is.
This combination of a lack of clarity and rhetorical heat meant that much of the press—and especially the business press, which tended to underplay consumer issues already—remained uncomfortable with the term, even after years of use, and so ultimately gravitated toward the far more industry-friendly “subprime.”
In order to understand this submerging of the term “predatory lending” even as the actual practice escalated, we first need to look at where the term comes from. We are aware of business dictionaries, but we think the business press should be speaking the same language as everyone else, so we rely here on the Oxford English Dictionary to give us a quick etymology of the word “predatory.” It is from the Latin
praedatorius, the adjectival form of praedator, which means plunderer. Thus the definition of predatory is “Of, relating to, of the nature of, or involving plunder, pillage, or ruthless exploitation.”
But the OED includes a sub-definition for the business context. Thus we get this 1912 use of the term, the earliest the dictionary provides, from the Trenton Evening Times: “Wrongs done by industrial corporations which are not monopolies … such as … the elimination of competition by unfair or predatory practices.”
If we then scan down to the latest example of usage, from 2002, the target of the word is not other businesses but rather consumers. From Modern Maturity: “A loan company is considered predatory … when it makes a loan that a borrower can’t repay.”