NCJ Number
80359
Journal
Australian and New Zealand Journal of Criminology Volume: 14 Issue: 3 Dated: (September 1981) Pages: 179-182
Date Published
1981
Length
4 pages
Annotation
This article describes the nature of criminal usury ('loan sharking') as practiced in the United States.
Abstract
Criminal usury is the issuing of loans at illegal interest rates, usually by organized crime, to persons unable to obtain a loan through legitimate channels. In most large cities, the interest on such a loan is 20 percent, with the interest payable weekly until the principal is repaid. Under some loan conditions, the borrower may take as long as he/she wishes to repay the principal, so long as the interest payments are made weekly. The longer the term of the loan, the greater the profit for the loan shark. Under another method of repayment, a time limit is given for repayment of the principal, and even though repayment may be completed before the loan period terminates, interest must be paid for the full period. Should a borrower miss a weekly interest payment or make only partial payment, a penalty is assessed. The nature of the penalty is at the discretion of the loan shark. Double payments may be demanded for a period of time, or an amount may be added to the principal, thus increasing the amount of the interest paid thereafter. Loan sharking has four operative components: the financiers, those who pay the loans to borrowers, those who collect the weekly payments, and the enforcers who intimidate and punish borrowers who fail to pay on time. Criminal usury is one of the major problems facing American law enforcement today.