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Japan’s banks secure access to police agency database to help screen for yakuza and other ‘anti-social forces’

by Alex Martin

Staff Writer

Banks have a new tool to bar underworld borrowers.

Starting Thursday, the Japanese Bankers Association said its members will be able to screen individual loan seekers using the National Police Agency’s database of organized crime members.

Banks compile their own lists on yakuza and other so-called anti-social forces to keep undesirable persons from using their services to perform transactions. The police database, which is already available to the Japan Securities Dealers Association, could enhance banks’ accuracy and efficiency when screening for gang members.

The JBA said banks can connect to the police database through the government-affiliated Deposit Insurance Corporation of Japan.

Inquiries can be made through terminals set up in banks. If a person matches a record on the police database, the relevant prefectural police department will be asked to conduct further identification. If the subject is confirmed to be an organized crime member, banks can reject the transaction. Use of the service will be limited to those seeking new individual loans.

Shady loans to the yakuza were cast into the spotlight in 2013 when Mizuho Bank, one of Japan’s three megabanks, came under the scrutiny of the Financial Services Agency for lending to people linked with organized crime groups. The financial watchdog discovered the bank had engaged in 230 transactions with people with ties to the mob, involving funds of more than ¥200 million, mostly in the form of car loans.

The case led to the resignation of the chairman of the Mizuho Financial Group, and dozens of bank executives were penalized. The FSA ordered the bank to improve its operations. The scandal’s impact extended beyond Mizuho, with other banks admitting to having extended loans to mobsters.

The JBA is comprised of 120 regular members, including the big three — Mizuho Bank, the Bank of Tokyo-Mitsubishi UFJ and the Sumitomo Mitsui Banking Corp. It has 72 associate members and dozens of special members.

Since the Mizuho case, the association has been stepping up its push to secure access for its members to the police database.

“The JBA will continue to work toward thoroughly cutting off ties with anti-social forces by effectively using the National Police Agency’s organized crime database,” the group said in a statement.

The yakuza, Japan’s home-grown mafia, have been engaged in numerous criminal activities including extortion, prostitution, gambling, drugs and weapons trafficking, as well as more sophisticated white-collar crime.

Lawmakers and regulators have passed a series of laws and ordinances over the past decades aimed at curtailing the activities of yakuza groups. Local anti-gang ordinances that extended across all 47 prefectures by 2011 prohibit citizens from doing business with the yakuza. These measures have put a financial strain on organized crime syndicates, and coupled with years of police crackdowns, have seen its membership steadily falling.

The NPA said the number of gangsters, including registered yakuza members and those affiliated with the yakuza, stood at 39,100 at the end of 2016, down 7,800 compared to the previous year when the Yamaguchi-gumi, Japan’s largest and most powerful yakuza crime syndicate, split into rival factions.