From society’s perspective, the wide availability of cheap credit is generally considered a good thing, as it allows for productive investment, consumption smoothing over consumers’ lifetimes, and a form of risk-pooling not entire dissimilar to public support or insurance programs. (It is underappreciated that consumer credit is, effectively, one of the largest welfare programs in the United States. Chargeoffs of e.g. credit card debt effectively transfer a private benefit to the defaulting consumer in return for a diffuse cost to the rest of the public, mediated by the financial industry; the net amount of them is almost as much as food stamps.)

Discrimination in mortgage lending