A Fighting Chance

Changes were everywhere. Amelia was no longer my buddy. Now a teenage girl with a mane of long, curly hair, she regarded me as a complete pain in the rear—her rear. Bruce played referee, and he blew the whistle on both of us plenty of times. Still, even if she didn’t want my opinion on one single thing, I could see that she was turning into a pretty sensible young woman.

Alex was changing, too. He was still a cranky kid who butted his way through life, but by seventh grade he was taller than I was. He was also whip smart and very funny. We had bought him a rudimentary Texas Instruments computer when he was five, and by now he was a full-fledged computer geek. At his prodding, the four of us—Bruce, Alex, Trover, and I—watched every episode of Star Trek: The Next Generation and loved almost every minute of it. Meanwhile, Alex went about the tough business of growing up.

Amelia headed off to college. Alex read stacks of books. For the first time in more than a decade, the knot in my stomach began to ease. Maybe I hadn’t ruined my kids after all. I was making peace with being a Working Mother.

Banking Isn’t Boring

I kept teaching bankruptcy, but the world outside my classroom was changing, too. The numbers of people going bankrupt kept climbing, in good times and bad. By 1990, more than seven hundred thousand families filed for bankruptcy in a single year—the number had more than doubled in the decade since I had started teaching. That shocked me.

Early one spring semester, a student came by. She settled herself in and made some small talk, looking everywhere but at me. Finally, she asked if she could close the door. She wasn’t the first—I knew what was coming.

“My parents are bankrupt.” She started to cry. I pushed a box of tissues across the desk and waited.

They had a small business. It went under, but not until after her parents had cashed out their retirement savings and lost the house.

She gave a strangled sob. I came around the desk and pulled up a chair next to her. I rubbed her forearms and patted her hands. She didn’t care that her parents couldn’t help her with school—she’d been on her own for a while. She cried because the world was imploding for people she loved.

And it spilled out beyond classes. At school, I heard from secretaries and cafeteria workers. I heard from other professors whose children or old friends were in trouble. Sometimes someone would stop me in the mailroom or while I was waiting in line for a sandwich. Most people didn’t ask for help. They just seemed to want me to know. I think they hoped to hear me say, “There are a lot of good people who end up bankrupt.” At least, that’s what I believed, so that’s what I always said.

In the early 1990s, the big banks stepped up their efforts to change the bankruptcy laws.

They got in the fight through an odd twist in an old law. Ever since the days of the Founding Fathers, the United States had had laws in place that made it illegal to lend money at extraordinarily high interest rates, a practice known as usury. Later, during the Great Depression, the United States created more regulations to ensure that banking would be safe and dependable. From that time on, banking became a pretty boring business. Banks weren’t allowed to speculate in crazy, risky ventures. Banks had to keep plenty of money in reserve in case anything went wrong. FDIC insurance promised to protect the deposits entrusted to the banks by their customers. And, since the usury laws put caps on interest rates, the only way for a bank to make a profit was to go to a lot of trouble to make sure that nearly all of their loans would be repaid—in full and on time. Bankers put plenty of safeguards in place so they wouldn’t lend money to people who couldn’t pay them back.

With usury laws and the 1930s banking regulations as a backdrop, banks played a really important role in helping America’s economy grow. They lent the money for families to buy homes, and those monthly payments became a sort of giant savings plan, so that by the time people retired they owned a valuable asset—and a place where they could live without paying rent. Over time, banks financed cars and college educations. They helped small businesses get a start. A handful of larger banks served the biggest corporate clients, giving them access to the money they needed to expand and create jobs. Banking was all about evaluating customers, making sure that they would be able to repay loans, and keeping interest rates competitive with the bank across the street.