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But the advent of securitization, in which loans are bundled and sold to investors, required that loan documents move quickly from one purchaser to another.
Current rules refer to "incurred losses," in which loans are written down as it becomes clear that a particular loan is likely to default.
But there is often a secret mental ledger in which loans and payments, along with slights and expressions of gratitude, are carefully logged.
Mr. Douglas is exploring a similar plan in which loans would cover auxiliary power units, which would cut down on fuel used while a truck is idling.
That requires not cosmetic surgery, but honest administrators backed by determined politicians, a legal system in which loans make sense and a financial climate in which people want to lend.
But this recession can be attributed to the opposite — excessively loose monetary policy that helped to encourage the credit bubble in which loans made to all manner of poor risks, whether they were overleveraged companies or subprime mortgage borrowers.
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This next stage will be less spectacular, thanks to accrual accounting, in which loan losses are realised gradually and offset by reserves.
In the last few years, so-called no-doc and low-doc mortgages — in which loan applicants can avoid formalities like pay stubs and instead simply state their income — have surged in popularity.
Mr. Cuomo and Congressional committees are looking into a practice in which loan companies provide payments to universities or perks to school officers in exchange for being designated as "preferred" lenders.
Mr. Cuomo's investigation identified instances in which loan companies paid universities based on the amounts borrowed by students, as well as questionable ties between financial aid administrators and lenders.
The Grameen Foundation has developed a tool it calls the Progress Out of Poverty index, in which loan recipients can rate their progress in a series of simple, yet carefully developed, questions.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com