Financial History Issue 130 (Summer 2019) | Page 30
state officials and industry insiders, have
regularly yielded new laws governing small
loans, which then produce fresh problems
of implementation and interpretation as
the law has journeyed down to the street
level—into local loan offices, retail stores,
courthouses and government agencies.
Over time, one thing has remained con-
stant—the search for a way to govern
small-sum lending has always led back to
the law. Today, as in the past, many Amer-
icans remain confident that the right regu-
lation can fix fringe finance. The only ques-
tion is how. For present-day policymakers,
the past does not yield a definitive answer
to this complicated question. Rather, these
stories underscore how tricky it has been
to devise a solution to the small loan prob-
lem over the past century.
But knowledge of this history can help
policymakers to sidestep some of the chal-
lenges that have stymied prior attempts
at reform, while expanding our collective
sense of what is possible. Through reclaim-
ing some of the richness of past policy
experiments and reconstructing legal and
commercial worlds that bear little resem-
blance to our own, this history deepens
our understanding of how law works in
practice and how legal change occurs over
time. Our current regime of regulation
for small loans is not the only one imag-
inable. The small-sum lending market
has always been constituted through law,
but the rules of the game have changed
from decade to decade through the work
of judges and legislators, borrowers and
lenders, lawyers and law reformers.
If history teaches us nothing else, it is
that the past is not insurmountable. As
historian Michael B. Katz once wrote, we
study history not to be trapped by it “but to
transcend it.” The search for justice within
capitalism will continue, but what came
before need not dictate what will follow.
Anne Fleming is a Professor of Law at
Georgetown University. She is the author
of City of Debtors: A Century of Fringe
Finance (Harvard 2018), which received
the Ralph Gomory Prize from the Busi-
ness History Conference and the best
book award from the American College
of Consumer Financial Services Lawyers
in 2019.
New York City Mayor Fiorello LaGuardia strongly opposed the Uniform Small Loan Act,
as he claimed it permitted “legalized usury” and was a boon to the small loan “racket.”
28 FINANCIAL HISTORY | Summer 2019 | www.MoAF.org
Exerpt adapted from City of Debtors: A
Century of Finance by Anne Fleming, pub-
lished by Harvard University Press.