Prosecutors Declare War on Predatory Lending

Prosecutors Declare War on Predatory Lending. February. 06, 2010 08:16. dawn@donga.com ceric@donga.com.

Prosecutors yesterday declared war on loan sharks who exploit working class people in urgent need of money by charging exorbitant interest.

The violent crime department of the Supreme Public Prosecutors` Office held a national videoconference with prosecutors specializing in violent crime and the chiefs of the 18 criminal affairs departments exclusively for organized crime and narcotics last week.

They were ordered “to conduct a full-scale investigation into loan sharks who serve as sources of funds for organized crime rings.”

The direct investigation into predatory lending by prosecutors is considered unusual. Before, prosecutors had commissioned police to investigate the crime except in cases of stock price manipulation and violence committed by organized crime.

Prosecutors targeted for their investigation unregistered private lenders that loan money to people who do not qualify for loans from financial institutions due to huge debts and bad credit. Such lenders are also known to charge prohibitively high interest and use violence to recoup their loans.

Many such loan sharks were found to have ties with organized crime and used violence to get debtors to repay.

A prosecution source said, “We haven`t conducted a systematic investigation into large organized crime rings for the past several years,” adding, “By investigating the illegal lending market, we seek to trace the funding sources of organized crime and gather information on their crimes.”

Prosecutor-General Kim Jun-kyu said,“ I urge you to take stern action against crimes that steal money from the working class" in his Jan. 21 videoconference with prosecutors across the nation.

Cracking down on predatory lending is the top priority for prosecutors among crimes against the working class to be probed. After concluding this investigation, prosecutors will then focus on gambling, sex trafficking and corruption in reconstruction and redevelopment projects, areas used by organized crime as the basis for its activities.