Banks and police team up to spark credit crunch for Japan’s gangsters

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Japanese gangsters are poised for a credit crunch after the country’s banking lobby declared was fed with yakuza members defaulting car and small- loans and would work with police to cut them off.
The move comes amid a scandal engulfing Mizuho, ’s second-biggest financial group by assets, which said last month that had supplied gang members with loans via Orient Corp, a consumer-finance affiliate.
Takeshi Kunibe, of the Japanese Bankers Association, told reporters Thursday that the group would team with the National Police Agency to share information, so that gangsters seeking funds about 200 domestic and banks were cut off at the source.
After the scandal emerged, the Agency ordered Mizuho to improve control and compliance functions, declaring them “seriously” flawed. Lending to “antisocial forces” went for more than two years after was detected, the FSA said. Mizuho said that transactions totalled Y200m ($2m), mostly for car loans.
Authorities and banks in have struggled for years with the issue of how to with yakuza members, who tend to make or two instalments to avoid prosecution for non-payment, then retain the rest.
In 2009, a set by Tokyo governor Shintaro Ishihara to support small to midsized businesses collapsed, after a chunk of its loan portfolio found its way to the .
In 2010, the national police announced they were “doubling” efforts to clamp down on the yakuza. A year later, the police rolled out a law requiring loan applicants to sign a declaration that they were unaffiliated to the yakuza.
The Securities Dealers Association, representing about 500 brokers and intermediaries, this year began screening prospective clients with a police database of tens of thousands of yakuza-affiliated individuals.
Thursday’s move by the JBA could put Japan’s banks on a similar footing.
The squeeze on lending could enjoy some success, said Jake Adelstein, a Tokyo-based writer and yakuza watcher, whose life is set to be dramatised in a biopic starring British actor Daniel Radcliffe.
But he warned that loans may simply be channelled to so-called “associate members”, who do not show up in checks.