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Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Major non-bank money lender ordered to suspend operations

The Financial Services Agency on April 15 ordered major non-bank money lender Aiful Corporation to suspend operations at all of its branches for using overly aggressive tactics to collect debts in violation of the Money Lending Business Law. Aiful is the first major money lender to be ordered to suspend operations.

Aiful even telephoned borrowers' mothers or places of work to press them to borrow money from someone else to repay their debts. The FSA judged that these debt collection tactics are in violation of the Money Lending Business Law that prohibits money lenders from collecting debts by doing harm to the peace of private life and business using harassing words and deeds.

Aiful is not an isolated case, for forcible collection of loans is prevalent in most "consumer finance" companies.

In the light of the fact that about 8,000 people every year commit suicide because of economic difficulties, the Japanese Communist Party has argued in the Diet that legal loopholes allow non-bank money lenders to grant loans at rates of interest higher than the upper limits imposed by the Interest Restriction Law (15-20 percent), causing many borrowers to become multiple debtors.

In the House of Councilors Budget Committee meeting on March 15, Daimon Mikishi demanded that money lenders be penalized for charging extraordinary interest rates in violation of the Interest Restriction Law.

With the Supreme Court disallowing rates of interest to be higher than those under the Interest Restriction Law, calls for reviewing the system have increased. Urged by a sense of crisis, the money-lending industry has approached politicians of the Liberal Democratic, Komei and Democratic parties in a bid to gut legal controls.

Aiful Corp. is listed in the First Section of the Tokyo Stock Exchange. Its loan outstanding at the end of March 2005 was 1.47 trillion yen. Aiful President Fukuda Yoshitaka is ranked by the U.S. business magazine "Forbes" as the 80th billionaire in the world (the second Japanese).
- Akahata, April 15, 2006