Lending institutions don't inspire mass affection, particularly when credit is tightening and interest rates are rising. At times like these, critics sometimes bring to mind the nameless character in "The Grapes of Wrath" who lamented: "The bank is something more than men, I tell you. It's the monster. Men made it, but they can't control it."

Today, the ghost of Tom Joad inhabits the body of Sen. Charles Schumer, D-N.Y., who spies a monster scarier than banks: lenders who offer subprime mortgages. Contemplating the plight of their customers, some of whom are finding it hard to meet their obligations, he demands new controls to shackle the beast.

In the old days, financial institutions that refused to lend to people with low incomes or imperfect credit were accused of victimizing the needy. Today, financial institutions that make many loans to those same people are found guilty of the same crime.

The controversy stems from an increase in home foreclosures among people with subprime loans. These mortgages, provided to borrowers whose income or credit rating disqualifies them from standard loans, carry a higher interest rate and often feature balloon payments after a few years. Someone who can handle the initial payment may be overextended when the monthly cost jumps.

But the fact that some borrowers are behind on their payments is no condemnation of the system that furnished them credit. They are in the subprime market, after all, because their credit history or income suggests they are bad risks, and it's no shock to find that some of them turn out to be exactly that.

"Subprime" is a vile epithet to Schumer. But the very existence of this market is an achievement, since it offers funding to people who once were shut out of homebuying. Today, according to the Center for Responsible Lending, most mortgages provided to blacks, and 40 percent of those going to Hispanics, are of the subprime variety. In the past, these customers wouldn't have had to worry about foreclosure, because they would have been stuck renting.

As it happens, the overwhelming majority of subprime customers handle their obligations just fine. At last count, fewer than 14 percent of them were delinquent, meaning 86 percent were not. Most people pay what they owe, and those who don't suffer the consequences. Absent consequences, fewer people would repay, and mortgage providers would demand higher rates to lend to the remainder. "Helping" subprime borrowers would thus hurt most of them. Continued...