. >> loansharking is charging high interest rates on loans. at manhattan college looks at in the united states from after the civil war through the depression, and he calls this the birth of predatory lending, this period from the industrialization of america through the great depression. oliver: you will want a higher interest rate if you're going to take more risk? >> that gets into my take on the book, which i feel he does not quite nail it may be because her right about economics. i tend to look at supply and demand is the key determinants of any price. interest rate is the price of money, so i tend to think what is causing the rates to be this high on loans, and there are demand from borrowers who are in some cases desperate, then there is the supply from lenders who may or may not have enough money to supply, so why would rates be high? there's just not enough money round, which is usually not the case. the other is the person barbering is a risky prospect. or maybe it is they are not able to get a better deal. maybe they are an alcoholi

the link between loansharking and alcoholism.there is a new immigrant that doesn't speak the does not know what the terms mean. carol: i want to take you back to the birth of predatory lending. he writes about this. american moved west, the settlers preceded the banks. there were no organized banks out west of the ohio, all the way out to california. people got money wherever they could. supplyarks spring up to loans where conventional banks would not lend or had not yet gotten to. oliver: i guess that begs the question, you have lenders and sharks. but there is a gray area in between. in the book, how does he assess at what point you become a shark? >> one problem that abetted the loan sharks is states set a ceiling on lending rates, 6% or 7%. remember you have to take , inflation into account. if you had a fairly high inflation rate, 6% or 7% is especially for a loan with the carrying costs, and the processing was expensive. it was not high enough for the standard lenders to make any money, so they kind of left the field open.

loansharking is charging high interest rates on loans.m thes civil war up through the depression. he calls it the birth of predatory lending. this time, taking us from the industrialization of america to the great depression. thatr: to what degree does get mixed in with a capacity for risk-taking? you are going to want a higher interest rate if you are going to take on more risk? >> that gets to my take on the books which is he does not quite real it. -- nail it. look atcause i economics, i look at supply and demand to be the key determinants of price. i tend to think what is causing the rates to be this high on loans? there is the demand, and borrowers who are in some cases desperate. and then the supply from lenders who may or may not have enough money to supply. why would rates the high? you can think of two reasons. there is not enough money around, which is usually not the case. the other is the person who is borrowing is a risky prospect. is median paired in some way so they are not able to get a better deal. maybe they are an alcoh

the link between loansharking and alcoholism.ry doesn't speak the language and doesn't know what the teams -- terms mean. >> how to the birth of predatory lending come about? >> when the americans most west, the sellers preceded the banks. bankswere no organized outside west of ohio. people got money wherever they could and loan sharks sprang up to supply loans. where conventional banks wouldn't lend or had not yet gotten to. >> that begs the question, you have lenders and sharks. there is a gray area somewhere in between. at whatook, how the css point you become a shark? one problem that abetted the the ceiling on spending rates. it could only be six or 7%. they had a fairly high inflation rate. this is nothing for a small loan. enough for the standard lenders to make any money so they left the field open. the loan sharks were the only ones that were able to supply any money in those cases. one of the innovations came around in 1907. the russell sage foundation still existed today. shortly after that they came up with a uniform