A loan shark is a person who offers
loan
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
s at
extremely high interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
s, has strict terms of collection upon failure, and generally operates
outside the law.
Description
Because loan sharks operate mostly illegally, they cannot reasonably expect to be able to use the legal system to collect such debts, they often resort to enforcing repayment by terms of
blackmail
Blackmail is an act of coercion using the threat of revealing or publicizing either substantially true or false information about a person or people unless certain demands are met. It is often damaging information, and it may be revealed to fa ...
and threats of violence. Historically, many moneylenders skirted between legal and criminal activity. In the recent western world, loan sharks have been a prominent feature of the
criminal underworld
Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
.
Loan sharking is not to be confused with
predatory lending Predatory lending refers to unethical practices conducted by lending organizations during a loan origination process that are unfair, deceptive, or fraudulent. While there are no internationally agreed legal definitions for predatory lending, a 2006 ...
with extremely high interest rates such as
payday
A pay day or payday is a specified day of the week or month when one is paid, usually workers collecting wages from their employers.
Pay Day, PayDay or Payday may also refer to:
Arts, entertainment, and media Films
* ''Pay Day'' (1918 film), a ...
or
title loans
A title loan (also known as a car title loan) is a type of secured loan where borrowers can use their vehicle title as collateral. Borrowers who get title loans must allow a lender to place a lien on their car title, and temporarily surrender the h ...
, which is sometimes considered to be "loan sharking" (or, at least, unfavorably compared to loan sharking by critics) regardless of whether it is legal. A key difference between "traditional" loan sharking and predatory lending is that lenders alleged to be engaged in the latter practice are expected to stay within the law when making and collecting loans, and thus the debate into such practices often focuses on whether they are ethical as opposed to whether they are legal. However, laws regulating lending practices vary so widely between jurisdictions (even in the same country, particularly between states in the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
) that particular practices that might be technically legal (if arguably unethical) "predatory lending" in one jurisdiction might be considered illegal "loan sharking" if attempted in an identical manner in a different locale.
Japan
Regulation of moneylenders is typically much looser than that of banks. In Japan, the Moneylending Control Law requires only registration in each
prefecture
A prefecture (from the Latin ''Praefectura'') is an administrative jurisdiction traditionally governed by an appointed prefect. This can be a regional or local government subdivision in various countries, or a subdivision in certain international ...
. In Japan, as the
decades-long depression lingers, banks are reluctant to loan money and regulation has become tighter, illegal moneylending has become a
social issue
A social issue is a problem that affects many people within a society. It is a group of common problems in present-day society and ones that many people strive to solve. It is often the consequence of factors extending beyond an individual's cont ...
. Illegal moneylenders typically charge interest of 30 or 50% in 10 days (in Japanese, these are called "to-san" ('to' meaning ten and 'san' meaning three, or 10-3) or "to-go" ('to' meaning ten and 'go' meaning five, or 10-5), which is about 1.442 million % or 267.5 million % per annum. This is against the law that sets the maximum interest rate at 20%. These lenders usually do business with those who cannot get more money from banks, legitimate consumer loans, or credit cards.
Ireland
The
Central Bank of Ireland
The Central Bank of Ireland ( ga, Banc Ceannais na hÉireann) is Ireland's central bank, and as such part of the European System of Central Banks (ESCB). It is the country's financial services regulator for most categories of financial firms ...
were criticized for doing nothing to protect those with low incomes, the vulnerable or those who have low levels of financial literacy, from loan sharks, when it emerged in 2015 that up to 100,000 of the 360,000 loans given by the moneylenders broke the law.
Israel
Loansharking is one of the main activities of the
Israeli mafia
The Israeli mafia ( he, מאפיה ישראלית, Mafiyah Yisrelit, or , , "organized crime in Israel") are the organized crime groups operating in Israel or consisting of Israeli members. There are 16 crime families operating in Israel, five ma ...
.
Kazakhstan
The
National Bank of Kazakhstan
is the central bank of Kazakhstan.
History
The National Bank of Kazakhstan was established on the basis of the Kazakh Republican Bank of the State Bank of the USSR (since 1990 - the State Bank of the Kazakh SSR, since 1991 - the National State Ba ...
has been consistently fighting loan sharks since 2018. Thus, the maximum interest rate on a loan was limited to no more than 100% of the loan amount.
In 2020, a financial market regulation agency was separated from the National Bank of Kazakhstan to monitor the rights and legitimate interests of borrowers, to identify and eliminate systemic problems of the financial sector of the economy. A unified state register of microfinance organizations was introduced to legalize lenders.
Malaysia and Singapore
![Ah Long advertising](https://upload.wikimedia.org/wikipedia/commons/4/43/Ah_Long_advertising.jpg)
''Ah Long'' (derived from the
Cantonese
Cantonese ( zh, t=廣東話, s=广东话, first=t, cy=Gwóngdūng wá) is a language within the Chinese (Sinitic) branch of the Sino-Tibetan languages originating from the city of Guangzhou (historically known as Canton) and its surrounding are ...
phrase '大耳窿' ('big ear hole')) is a colloquial term for illegal loan sharks in
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
and
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...
. They lend money to people who are unable to obtain loans from banks or other legal sources, mostly targeting habitual gamblers. Often, they discreetly advertise by sticking notices, mostly on lamp posts and utility boxes around a neighbourhood, thus vandalising public property, as authorities must remove such advertisements. They charge high interest rates (generally about 40% per month/fortnight) according to Anti-Crime, Drug and Social Development Voluntary Organisation and frequently threaten violence (and administer it) towards those who fail to pay on time.
''Ah Long'' tactics
When a person fails to pay on time, the ''Ah Long''
will set fire, spray paint, lock up gates, splash, or write threats in paint or markers on the walls of the property of that person as a threat of violence and to scare, and perhaps shame, the borrower into repaying the loan. A common use of painting includes the characters "O$P$" meaning "owe money, pay money", as well as the debtors' unit number. According to local police authorities, there have been cases where borrowers and their family members were beaten or had their property damaged or destroyed, and some victims have committed suicide.
Vietnam
Just like Ah Longs, loan sharks in Vietnam are very common, especially in high population density area and industrial parks' surroundings and they mostly focus on poor worker, person that needs money urgently, gamblers,.... Many of these sharks offer a very high loan rates at 20% to 1000% per month. They mostly advertise on walls, electric poles...to advertising online on platforms such as Google and Facebook. Their operation varies from pawn shops to online operations via illegal applications. These operations aren't usually controlled by Vietnamese, but rather Vietnamese people living in Cambodia or Chinese operators. When the borrower is unable to pay debt, they will force the borrower to loan via apps or other loaners, then another, until they are able to pay(but mostly impossible since this case generate compound interests). If the borrower is unable to pay on time, the sharks will use every single ways to force borrower to repay, like sending threatening emails, text messages, annoying phone calls...to both borrower and their families and friends, sometimes they'll take gangsters to come over the borrower's properties like their house, companies,.....and spray
mắm tôm(
Belacans), spraying paints and feces. Most borrowers only loan a small amount of money, mostly below 10 million VNĐ, but with rates and compound rates, the true amount that they have to pay will always be much larger, about 10 to 100 time larger than what they have to pay if use official credit service suppliers. There are a lot of cases reported and most are solved by the police, but there are cases that can't be solved, thus, the unlucky borrower has to commit suicide or commit crime. Sometimes their children(if available) would be kidnapped.
In recent years the government are trying to do everything to stop these loaners from operating and propaganda people to not loan or borrow money from them, but it's very hard since the victims are mostly undereducated people and people that has limited knowledge about financials.
United Kingdom
The research by the government and other agencies estimates that 165,000 to 200,000 people are indebted to loan sharks in the United Kingdom. Illicit loan sharking is treated as a high-level crime by law enforcement, due to its links to organized crime and the serious violence involved. Payday loans with high interest rates are legal in many cases, and have been described as "legal loan sharking" (in that the creditor is legally registered, pays taxes and contributions, and can reclaim remittance if taking the case to adjudication; likewise there is no threat of harm to the debtor).
United States
19th-century salary lenders
In the late 19th-century US, the low legal interest rates made small loans unprofitable, and small-time lending was viewed as irresponsible by society. Banks and other major financial institutions thus stayed away from small-time lending. There were, however, plenty of small lenders offering loans at profitable but illegally high interest rates. They presented themselves as legitimate and operated openly out of offices. They only sought customers who had a steady and respectable job, a regular income and a reputation to protect. This made them less likely to leave the area before they paid their debt and more likely to have a legitimate reason for borrowing money. Gamblers, criminals, and other disreputable, unreliable types were avoided. They made the borrower fill out and sign seemingly legitimate contracts. Though these contracts were not legally enforceable, they at least were proof of the loan, which the lender could use to blackmail a
defaulter.
[ Haller & Alviti (1977)]
To force a defaulter into paying, the lender might threaten legal action. This was a bluff, since the loan was illegal. The lender preyed on the borrower's ignorance of the law. Alternatively, the lender resorted to
public shaming
Public humiliation or public shaming is a form of punishment whose main feature is dishonoring or disgracing a person, usually an offender or a prisoner, especially in a public place. It was regularly used as a form of judicially sanctioned puni ...
, exploiting the social stigma of being in debt to a loan shark. They were able to complain to the defaulter's employer, because many employers would fire employees who were mired in debt, because of the risk of them stealing from the employer to repay debts. They were able to send agents to stand outside the defaulter's home, loudly denouncing him, perhaps vandalizing his home with graffiti or notices. Whether out of gullibility or embarrassment, the borrower usually succumbed and paid.
[ Haller & Alviti (1977)]
Many customers were employees of large firms, such as railways or public works. Larger organizations were more likely to fire employees for being in debt, as their rules were more impersonal, which made blackmail easier. It was easier for lenders to learn which large organizations did this as opposed to collecting information on the multitude of smaller firms. Larger firms had more job security and the greater possibility of promotion, so employees sacrificed more to ensure they were not fired. The loan shark could also bribe a large firm's paymaster to provide information on its many employees. Regular salaries and paydays made negotiating repayment plans simpler.
The size of the loan and the repayment plan were often tailored to suit the borrower's means. The smaller the loan, the higher the interest rate was, as the costs of tracking and pursuing a defaulter (the overhead) were the same whatever the size of the loan. The attitudes of lenders to defaulters also varied: some were lenient and reasonable, readily granting extensions and slow to harass, while others unscrupulously tried to milk all they could from the borrower (e.g. imposing late fees).
[ Haller & Alviti (1977)]
Because salary lending was a disreputable trade, the owners of these firms often hid from public view, hiring managers to run their offices indirectly. To further avoid attracting attention, when expanding his trade to other cities, an owner would often found new firms with different names rather than expanding his existing firm into a very noticeable leviathan.
The penalties for being an illegal lender were mild. Illegal lending was a
misdemeanor
A misdemeanor (American English, spelled misdemeanour elsewhere) is any "lesser" criminal act in some common law legal systems. Misdemeanors are generally punished less severely than more serious felonies, but theoretically more so than adm ...
, and the penalty was forfeiture of the interest and perhaps the principal as well. But these were only ever imposed if the borrower sued, which he typically could not afford to do.
[ Haller & Alviti (1977)]
Opposition to salary lenders was spearheaded by social elites, such as businessmen and charity organizations. Businessmen were encouraged not to fire employees who were indebted to loan sharks so that the loan sharks could not blackmail their debtors ("pay up or we'll tell your boss that you're a deadbeat and you'll be fired"). Charities provided legal support to troubled borrowers. This fight culminated in the drafting of the Uniform Small Loan Law, which brought into existence a new class of licensed lender. The law was enacted, first in several states in 1917, and was adopted by all but a handful of states by the middle of the 20th century. The model statute mandated consumer protections and capped the interest rate on loans of $300 or less at 3.5% a month (51% a year), a profitable level for small loans. Lenders had to give the customer copies of all signed documents. Additional charges such as late fees were banned. The lender could no longer receive
power of attorney
A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs (which may be financial or regarding health and welfare), business, or some other legal matter. The person auth ...
or
confession of judgment over a customer. These licensing laws made it impossible for usurious lenders to pass themselves off as legal. Small loans also started becoming more socially acceptable, and banks and other larger institutions started offering them as well.
20th-century gangsters
In the 1920s and 1930s, American prosecutors began to notice the emergence of a new breed of illegal lender that used violence to enforce debts. The new small lender laws had made it almost impossible to intimidate customers with a veneer of legality, and many customers were less vulnerable to shaming because they were either self-employed or already disreputable. Thus, violence was an important tool, though not their only one. These loan sharks operated more informally than salary lenders, which meant more discretion for the lender and less paperwork and bureaucracy for the customer. They were also willing to serve high-risk borrowers that legal lenders wouldn't touch.
Threats of violence were rarely followed through, however. One possible reason is that injuring a borrower could have meant he couldn't work and thus could never pay off his debt. Many regular borrowers realized the threats were mostly bluffs and that they could get away with delinquent payments. A more certain consequence was that the delinquent borrower would be cut off from future loans, which was serious for those who regularly relied on loan sharks.
One important market for violent loan sharks was illegal gambling operators, who couldn't expose themselves to the law to collect debts legally. They cooperated with loan sharks to supply credit and collect payments from their punters. Thieves and other criminals, whose fortunes were frequently in flux, were also served, and these connections also allowed the loan sharks to operate as fences. Another type of high-risk customer was the small businessman in dire financial straits who couldn't qualify for a legal loan.
Violent loansharking was typically run by criminal syndicates, such as the
Mafia
"Mafia" is an informal term that is used to describe criminal organizations that bear a strong similarity to the original “Mafia”, the Sicilian Mafia and Italian Mafia. The central activity of such an organization would be the arbitration of d ...
and
Irish Mob
The Irish Mob (also known as the Irish mafia or Irish organized crime) is a collective of organized crime syndicates composed of ethnic Irish members which operate primarily in Ireland, the United States, Canada and Australia, and have been in ...
. Many of these were former
bootleggers
Bootleg or bootlegging most often refers to:
* Bootleg recording, an audio or video recording released unofficially
* Rum-running, the illegal business of transporting and trading in alcoholic beverages, hence:
** Moonshine, or illicitly made ...
who needed a new line of work after the end of
alcohol prohibition
Prohibition is the act or practice of forbidding something by law; more particularly the term refers to the banning of the manufacture, storage (whether in barrels or in bottles), transportation, sale, possession, and consumption of alcoholic be ...
. Towards the 1960s, loan sharks grew ever more coordinated, and could pool information on borrowers to better size up risks and ensure a borrower did not try to pay off one loan by borrowing from another loan shark. The fearsome reputation of the Mafia or similar large gang made the loan shark's threat of violence more credible.
Mafia links
Origins in "salary buying", 1920-criminalization
Although the reform law was intended to starve the loan sharks into extinction, this species of predatory lender thrived and evolved. After high-rate salary lending was outlawed, some bootleg vendors recast the product as "salary buying". They claimed they were not making loans but were purchasing future wages at a discount. This form of loansharking proliferated through the 1920s and into the 1930s until a new draft of the
Uniform Small Loan Law closed the loophole through which the salary buyers had slipped. Salary-buying loan sharks continued to operate in some southern states after World War II because the
usury rate was set so low that licensed personal finance companies could not do business there.
Post-criminalization
Organized crime began to enter the cash advance business in the 1930s, after high-rate lending was criminalized by the Uniform Small Loan Law. The first reports of mob loansharking surfaced in New York City in 1935, and for 15 years, underworld money lending was apparently restricted to that city. There is no record of syndicate "
juice
Juice is a drink made from the extraction or Cold-pressed juice, pressing of the natural liquid contained in fruit and vegetables. It can also refer to liquids that are flavored with concentrate or other biological food sources, such as meat ...
" operations in Chicago, for instance, until the 1950s.
In the beginning, underworld loansharking was a small loan business, catering to the same populations served by the salary lenders and buyers. Those who turned to the bootleg lenders could not get
credit
Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), ...
at the licensed companies because their incomes were too low or they were deemed poor risks. The firms operating within the
usury
Usury () is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is ch ...
cap turned away roughly half of all applicants and tended to make larger loans to married men with steady jobs and decent incomes.
Those who could not get a legal loan at 36% or 42% a year could secure a cash advance from a mobster at the going rate of 10% or 20% a week for small loans. Since the mob loans were not usually secured with legal instruments, debtors pledged their bodies as collateral.
In its early phase, a large fraction of mob loansharking consisted of
payday lending
A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates.
The term "payday" in payday loan refers to ...
. Many of the customers were office clerks and factory hands. The loan fund for these operations came from the proceeds of the numbers racket and was distributed by the top bosses to the lower echelon loan sharks at the rate of 1% or 2% a week. The 1952
B-flick ''
Loan Shark
A loan shark is a person who offers loans at extremely high interest rates, has strict terms of collection upon failure, and generally operates outside the law.
Description
Because loan sharks operate mostly illegally, they cannot reasonably ...
'', starring
George Raft
George Raft (born George Ranft; September 26, 1901 – November 24, 1980) was an American film actor and dancer identified with portrayals of gangsters in crime melodramas of the 1930s and 1940s. A stylish leading man in dozens of movies, Raft is ...
, offers a glimpse of mob payday lending. The waterfront in Brooklyn was another site of extensive underworld payday advance operations around mid-century.
1960s heyday–present
Over time, mob loan sharks moved away from such
labor intensive
Labor intensity is the relative proportion of Labour (economics), labor (compared to Capital (economics), capital) used in any given process. Its inverse is capital intensity.
Labor intensity has been declining since the onset of the Industrial Re ...
rackets. By the 1960s, the preferred
clientele
In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for m ...
was small and medium-sized businesses. Business customers had the advantage of possessing assets that could be seized in case of default, or used to engage in fraud or to launder money. Gamblers were another lucrative market, as were other criminals who needed financing for their operations. By the 1970s, mob salary lending operations seemed to have withered away in the United States.
At its height in the 1960s, underworld loansharking was estimated to be the second most lucrative franchise of organized crime in the United States after
illegal gambling
Gaming law is the set of rules and regulations that apply to the gaming or gambling industry. Gaming law is not a branch of law in the traditional sense but rather is a collection of several areas of law that include criminal law, regulatory law, c ...
. Newspapers in the 1960s were filled with sensational stories of debtors beaten, harassed, and sometimes murdered by mob loan sharks. Yet careful studies of the business have raised doubts about the frequency with which violence was employed in practice. Relations between creditor and debtor could be amicable, even when the "
vig" or "juice" was exorbitant, because each needed the other. FBI agents in one city interviewed 115 customers of a mob loan business but turned up only one debtor who had been threatened. None had been beaten.
Non-mafia sharks
Organized crime has never had a monopoly on
black market
A black market, underground economy, or shadow economy is a clandestine market or series of transactions that has some aspect of illegality or is characterized by noncompliance with an institutional set of rules. If the rule defines the se ...
lending. Plenty of vest-pocket lenders operated outside the jurisdiction of organized crime, charging usurious rates of interest for cash advances. These informal networks of credit rarely came to the attention of the authorities but flourished in populations not served by licensed lenders. Even today, after the rise of corporate
payday lending
A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates.
The term "payday" in payday loan refers to ...
in the United States, unlicensed loan sharks continue to operate in
immigrant enclaves and low-income neighborhoods. They lend money to people who work in the
informal sector
An informal economy (informal sector or grey economy) is the part of any economy that is neither taxed nor monitored by any form of government.
Although the informal sector makes up a significant portion of the economies in developing countrie ...
or who are deemed to be too risky even by the check-cashing creditors. Some beat delinquents while others seize assets instead. Their rates run from 10% to 20% a week, just like the mob loan sharks of days gone by.
Non-standard lenders in the United States
In the United States, there are lenders licensed to serve borrowers who cannot qualify for standard loans from mainstream sources. These smaller, non-standard lenders often operate in cash, whereas mainstream lenders increasingly operate only electronically and will not serve borrowers who do not have bank accounts. Terms such as
sub-prime lending
In finance, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subpri ...
, "non-standard consumer credit", and
payday loans
A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates.
The term "payday" in payday loan refers to ...
are often used in connection with this type of
consumer finance
Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.
When planning personal fi ...
. The availability of these services has made illegal, exploitative loan sharks rarer, but these legal lenders have also been accused of behaving in an exploitative manner. For example, payday loan operations have come under fire for charging inflated "service charges" for their services of cashing a "payday advance", effectively a short-term (no more than one or two weeks) loan for which charges may run 3–5% of the principal amount. By claiming to be charging for the "service" of cashing a paycheck, instead of merely charging interest for a short-term loan, laws that strictly regulate moneylending costs can be effectively bypassed.
Payday lending
Licensed payday advance businesses, which lend money at high rates of interest on the security of a postdated check, are often described as loan sharks by their critics due to high interest rates that trap debtors, stopping short of illegal lending and violent collection practices. Today's payday loan is a close cousin of the early 20th century salary loan, the product to which the "shark" epithet was originally applied, but they are now legalised in some states.
A 2001 comparison of short-term lending rates charged by the
Chicago Outfit
The Chicago Outfit (also known as the Outfit, the Chicago Mafia, the Chicago Mob, the Chicago crime family, the South Side Gang or The Organization) is an Italian-American organized crime syndicate or crime family based in Chicago, Illinois, tha ...
organized crime syndicate and payday lenders in California revealed that, depending on when a payday loan was paid back by a borrower (generally 1–14 days), the interest rate charged for a payday loan could be considerably higher than the interest rate of a similar loan made by the organized crime syndicate.
[James, Stephen (19 July 2001)]
"The ancient evil of usury"
''Sacramento News & Review''. Retrieved 6 March 2010. However the violent collection practices of the organized crime can ensure a lower rate of unpaid loans. The absence of taxes further reduces the cost of lending in this case.
See also
*
Debt bondage
Debt bondage, also known as debt slavery, bonded labour, or peonage, is the pledge of a person's services as security for the repayment for a debt or other obligation. Where the terms of the repayment are not clearly or reasonably stated, the pe ...
*
Debt of developing countries
The debt of developing countries usually refers to the external debt incurred by governments of developing countries.
There have been several historical episodes of governments of developing countries borrowing in quantities beyond their abilit ...
*
Mortgage discrimination
Mortgage discrimination or ''mortgage lending discrimination'' is the practice of banks, governments or other lending institutions denying loans to one or more groups of people primarily on the basis of race, ethnic origin, sex or religion.
Instan ...
*
Organized crime
Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
*
Overdraft protection
An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. For water resources, it can be groundwater in an aquifer. In these situations the account is s ...
loans
*
Payday loan
A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates.
The term "payday" in payday loan refers to ...
*
Poverty industry The terms poverty industry or poverty business refer to a wide range of money-making activities that attract a large portion of their business from the poverty, poor. Businesses in the poverty industry often include payday loan centers, pawnbroker, ...
*
Refund anticipation loan
Refund anticipation loan (RAL) is a short-term consumer loan in the United States provided by a third party against an expected tax refund for the duration it takes the tax authority to pay the refund. The loan term was usually about two to three ...
*
Securitization
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling ...
*
Settlement (finance)
Settlement is the "final step in the transfer of ownership involving the physical exchange of securities or payment". After settlement, the obligations of all the parties have been discharged and the transaction is considered complete.
In the con ...
*
Title loan
A title loan (also known as a car title loan) is a type of secured loan where borrowers can use their vehicle title as collateral. Borrowers who get title loans must allow a lender to place a lien on their car title, and temporarily surrender the ...
*
Usury
Usury () is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is ch ...
Bibliography
References
{{DEFAULTSORT:Loan Shark
Banking
Extortion
Organized crime activity
Loans
Informal finance
Debt bondage
es:Usura