• Kyodo

  • SHARE

Many loan sharks have savings accounts at branches of major banks and use them to collect loans, a group of lawyers and other people helping usury victims said Sunday.

The group found in a study that in 87 percent of 1,016 cases involving borrowers mainly from Tokyo, loan sharks demanded that capital and interest be paid to accounts at UFJ Bank, Mizuho Bank, the Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corp.

More than half of the accounts were concentrated at branches in several areas of Tokyo, including Ueno and Shibuya, where ranking members of loan shark groups — many suspected of having yakuza ties — are believed to be based, the group said.

The loan sharks probably have accounts at major banks because those financial institutions have many branches, it added.

The group, established in March 2001 to tackle usury and unscrupulous loan-collection methods, plans to inform the banks in August about the accounts.

Yuji Kimura, secretary general of the group, said he believes it would be effective if the banks would take actions like canceling accounts that are regularly used to collect loans.

On Friday, the Diet enacted a bill to tighten penalties on loan sharks. The new legislation raises the maximum fine on unscrupulous corporate moneylenders to 100 million yen, while freeing borrowers from the obligation to pay interest to lenders charging rates above the legal limit of 109.5 percent per year.

The amendments are to go into effect in January, but some of the clauses to tighten penalties will be implemented at the end of August.

The legislation also allows authorities to impose a fine of up to 10 million yen or imprisonment of up to five years on lenders who are not registered or who charge illegal interest rates. At present, maximum penalties on unscrupulous moneylenders are either a fine of 3 million yen or imprisonment of three years.