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Loan sharking=Organized Crime, Predatory Lending=Payday Lenders
A loan shark is a person or body that offers
illegal unsecured loans at high interest rates to individuals, often backed by blackmail or threats of violence. They provide
credit to those who are not willing or are unable to obtain it from more respectable sources, usually because interest rates
commensurate with the perceived risk are illegal.
Payday loans and other aspects of consumer
finance have made true loan sharks rarer, though some legitimate lenders have been accused of behaving in an exploitative
manner.
Payday loan operations have also come under
fire for charging inflated "service charges" for the service 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 which strictly regulate
money lending costs can be effectively bypassed.
“One of the requirements for Loan Sharking is an
extremely high interest rate: According to federal law it is an extortionate extension of credit or extortionate credit transaction
with an extremely high interest rate, which is defined as higher than 45% annual
percentage rate (APR of greater than 45%)” said Special Agent Kowenhoven - Special Agent Kowenhoven is Acting Organized
Crime Supervisor of the Philadelphia Division of the FBI.
I realize that the transaction that appears below does not violate the law
according to Federal law under Loan Sharking; but these business practices that 5/3 bank in Ohio employs are beyond extreme high interest rates. If a loan shark did the same thing that 5/3 bank did, they would be in jail,
because it’s illegal. 5/3 bank has managed to exempt themselves from the
law.
Originally I over drafted my account by $7.94. They charged me $33 for an over draft fee. That’s
$33 divided by $7.94 = 4.15617128, that’s
416%, but then we add a $6.00 overdraft fee per day,
which is 76% not annual…PER DAY, the total interests for an overdraft of $16.89
in less than one month was $169.11, yes that’s right…1101%
in
fees in less than one month. It would be worse if I was overdrawn by $1, the
overdraft fees would be the same...exaggerated and unjust.
|
Overdraft |
Overdraft fee |
Percentage |
Date |
|
$7.94 |
|
|
9/18/2006 |
|
$33.00 |
416% |
9/19/2006 |
|
$24.00 |
302% |
9/21/2006 |
|
$ 6.00 |
76% |
9/22/2006 |
|
$8.95 |
|
|
9/25/2006 |
|
$18.00 |
|
9/25/2006 |
|
$33.00 |
|
9/26/2006 |
|
$ 6.00 |
|
9/26/2006 |
|
$ 6.00 |
|
9/27/2006 |
|
$ 6.00 |
|
9/28/2006 |
|
$ 6.00 |
|
9/29/2006 |
|
$18.00 |
|
10/2/2006 |
|
$ 6.00 |
|
10/3/2006 |
|
$ 6.00 |
|
10/4/2006 |
|
$ 6.00 |
|
10/5/2006 |
|
$ 6.00 |
|
10/6/2006 |
|
|
$ 6.00 |
|
10/10/2006 |
|
$16.89 |
$186.00 |
|
|
I would like to ask our Ohio Government officials, to PLEASE
do something about this exploitative way of business practices that 5/3 bank and other banks in Ohio use.
The fees which they used to charge for the ATM fees are
regulated, and now it’s time for us to act and set a limit on what banks charge on overdraft fees.
If you are a consumer who lives in Ohio and if you agree
with me, please send an E-mail to our leaders, so that it is constantly in their mind; until something is done to abolish
this exploitative business practice of charging over inflated “Overdraft fees” to consumers, especially the poor who are the main victims in this outrage.
I know this will take an act of congress to change
this, so let’s get started.
This has been forwarded to the following government
officials:
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
Hi! Theresa Morris-Ramos let me know when you're going to be in the Toledo Area, so I can come by and say
Hi to you and Macie Kaptur(I think she is the greatest).
_____________________________________________________________
_____________________________________________________________
The National Consumer Law Center is
America’s consumer law expert, helping consumers, their advocates, and public policy makers to use powerful consumer
laws to build financial security and assure marketplace justice for vulnerable individuals and families.
National Consumer Law Center
77 Summer Street, 10th Floor
Boston, MA 02110
Web page: http://www.consumerlaw.org/index.shtml
Contact: nclc@consumerlaw.org
_____________________________________________________________
UPDATES
November 15, 2006
Jorge
Gallardo
2344
Glenwood Ave
Toledo, OH 43620
Re: Fifth Third Bank
Complaint #:
321325
Dear Mr. Gallardo:
I have carefully
reviewed the complaint you recently filed with Attorney General Petro's Consumer Protection Section and feel this matter may
more appropriately fall within the jurisdiction of the agency listed below:
Board of Governors of the Federal Reserve System
Division of Consumer and Community Affairs
20th and C Streets, N.W., Stop 801
Washington, DC 20551
This agency may
be in a better position to assist you in obtaining a favorable resolution to your problem and accordingly, I have forwarded
your complaint to them for handling. Your future communications should be directed to them. I hope this agency will
be able to assist you in resolving your complaint.
Thank you for contacting
Attorney General Petro's Consumer Protection Section. Please feel free to contact us should you have consumer-related
problems in the future.
Very truly yours,
JIM PETRO
Attorney General
Theresa K. Dinsmore
Consumer Protection Section
(614) 466-2706
TDinsmore@ag.state.oh.us
(800) 282-0515 Toll Free
(614) 728-7583 (Fax)
2168
PLEASE NOTE: If you are not already utilizing our paperless
system, please read the following: Our office prefers to forward complaints and receive correspondence electronically via
e-mail. If available, we would like all future responses sent to the
e-mail
address provided above. Thank you for your cooperation.
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