Recently, the New York Attorney General’s Office announced indictments of nearly a dozen individuals tied to an alleged organized crime family for engaging in broad scale illegal loansharking. The long-term investigation reportedly uncovered “the largest” loan sharking operation ever investigated by the agency, with defendants allegedly saddling victims (lured in by an illegal gambling operation) with interest payments that topped $1 million in just a single year.
Investigators say victims were required to drop off weekly interest payments at “exorbitant” rates that averaged 200 percent annually, setting a trap of high-cost debt for those who took out the loans.
Meanwhile, let’s compare that to the investigation into payday lending firms that was suddenly dropped by the Consumer Financial Protection Bureau under the Trump administration earlier this year. The CFPB announced in January it was no longer pursuing litigation against a group of payday lenders – despite the fact that this group allegedly carried interest rates as high as 950 percent annually. That is almost five times as much what the accused loan sharks in New York were allegedly charging their victims. Continue reading