Well, kind of. Looking a little deeper, here are Allen Fishbein and Harold Bunce, in a 2001 article about subprime and predatory lending published by the Department of Housing and Urban Development:
The term “predatory lending” is a shorthand term used to encompass a wide range of abuses. Although there is broad public agreement that predatory lending should have no place in the mortgage market, there are differing views about the magnitude of the problem and even how to define practices that make a loan predatory.
Time hasn’t clarified much. Researchers writing in The Journal of Consumer Affairs last fall noted that vague and competing definitions of “predatory lending” hamper regulatory activity and efforts to track how often the practice occurs. They tell us:
In order to address predatory lending adequately, there needs to be a differentiation between what constitutes abusive lending, predatory lending, and mortgage fraud. Descriptions of predatory lending are plentiful, but a precise definition that would inform regulators and consumer advocates is non-existent.
In an interview with CJR, Lucy Delgadillo, the lead author of the article and an associate professor at Utah State, identified the four traits common to all the definitions of “predatory lending” that she and her colleagues found: 1) It targets vulnerable populations, like the elderly and minorities, who are often poorer and less sophisticated financially; 2) It lends more than than the borrower can be expected to repay; 3) It involves conspiratorial activity between, say, appraisers and loan officers; and 4) It involves the intention to steal, through, say, equity stripping.
This makes sense, but we are still left with the fact that the term is broad and slippery enough to have defied a common definition after more than a decade of use in the national media. The fact is that “subprime lending,” better defined and more broadly accepted, was poised for the press to adopt in a way that “predatory lending” was not.
The importance of the term “predatory lending” is its injection of a much-needed moral dimension into the public argument. The press, especially the business press, is often uncomfortable with such an approach. That’s too bad. But there is also the fact that the very complexity of “predatory lending” threatens to render it imprecise to a fault. Which is to say that, frequently, any reader looking to move beyond the definition of “predatory lending” as bad lending—and into the realm of unscrupulous lending—will run into confusion. For example, the kind of lending we are discussing systematically targeted whole communities, but the words themselves give us very little insight into that aspect of the practice. To round out the term “predatory lending” then, we need to consider two important and related terms: “redlining” and “reverse redlining.”
Redlining is the denial of credit in certain, typically urban neighborhoods based on their racial makeup. The term comes out of the Chicago activist community in the late 1960s, according to scholar Amy Hillier, and refers to a practice dating to the 1930s when the Depression-era Home Owners’ Loan Corporation drew up maps that designated these neighborhoods as high-risk investments—and outlined them in red. Following from redlining, a practice by no means dead, is the more recent “reverse redlining,” which indicates an area of enthusiastic bad lending—expensive, deceptive, and heavily marketed—rather than a refusal to lend.
These terms get at the nature of lending “choices” in poor urban areas. The subprime industry, which came of age in the lending vacuum redlining created, is able to target these communities because prime lenders are (still) reluctant to serve them. And so predatory lending has thrived here (as have foreclosures). You can’t understand the practice of predatory lending if you don’t understand all of this.
That brings us to the term “subprime,” which overwhelmed “predatory” in the middle of the decade as the market exploded and subprime assumed an aura of legitimacy (subprime leader Ameriquest, you’ll recall, was the sponsor of the 2005 Super Bowl halftime show and owned not one but