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Revised money lending law creating desperate housewives

22 Comments

A year has now passed since the revised Money Lending Business Law (MLBL) came into force. The law, which aimed to prevent people from being snowed under by multiple debts, is particularly hard on hard-up housewives who take out loans unbeknownst to their spouses.

Nikkan Gendai (July 5) introduces one such woman, the pseudonymous Kazuko, who regularly took out loans of around 40,000 to 50,000 yen a month to supplement the income of her husband, who operates a bicycle shop.

She eventually found herself owing over 2 million yen. Then she spotted an ad on the Internet for a service that promised that it could help people reduce both accrued interest and principal by a single "debt consolidation" loan.

Using the pretext that she wanted to visit a former school classmate who been hospitalized in Kyushu, Kazuko instead made her way to Tokyo. But the man there informed her that due to the terms of the new law, he couldn't extend a loan. She was already in hock to several companies for over 2 million yen -- more than one-third of her husband's annual income.

Instead, the company referred her to an attorney. "You want to streamline your debts?" the attorney asked. He set to work, and not only arranged so that she only had to return the principal, but also that she could get a partial refund from the moneylenders on grounds they'd charged her excessive interest. The lawyer billed her 210,000 yen for services, plus a success fee.

But the legal action placed Kazuko's name on a nationwide blacklist, where it will remain for the next five to seven years. Which means any further credit is out of the question.

"I was tricked by a crooked operator," she says. "The attorney was part of the scam. They ripped me off and split the proceeds. While the amount of money I had to pay back got reduced, now I'm stuck with the lawyer fees. Nothing has improved my situation."

Kazuko was left with no choice but to come clean with her husband. While they did not divorce, their marriage was badly strained.

As evidence the new law is having an impact, a survey of small-lot borrowers conducted in April by the Finance Ministry found the number of respondents who had been unable to obtain loans rose to 25.7%, up from 16.8% in March of 2010.

Hiromi Arita, director of the Group for Women's Independence, tells Nikkan Gendai "Since the spigot from which housewives obtained needed funds was abruptly turned off, we are hearing about more cases of them being driven to desperation after they were swindled by crooked operators, or forced into borrowing from illegal loan sharks. Nearly all of the ones who were using cards to borrow from ATMs had concealed their activities from their husbands. Now these women are forced to deal with the problems on their own, and struggling over what to do."

Nami, age 48, who operates a small restaurant with her husband, was thinking about approaching a bank to obtain needed funds.

"Back in the days when we both worked at salaried jobs, when I needed money I could borrow with the ATM card," she says. "Now I don't know if I should use the bank or dig into my savings."

Unbeknownst to her husband, Nami owes about 1.5 million yen.

Some banks now do extend collateralized loans of up to 300,000 yen to housewives after a relatively simple credit check. But while that may not seem like a huge amount, it can mount up quickly, and before you know it, you're deep in the hole.

© Japan Today

©2022 GPlusMedia Inc.

22 Comments
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Since jurisprudence is asleep, it's obvious the initial loan will have to be forgiven; her husband didn't sign anything, and therefore he's not responsible. If Loan Co. #1 wasn't responsible to inform the husband, then the loan is not secured and therefore it is the loaners fault. The rest of the scammers will have to "suck-wind !" They had no business knowledge or obligation to the first initial loan application to make a determination to support a second and/or consecutive third loan in behest of the first loan ? No different if it's a first and second mortgage, the first mortgage gets paid first before the second mortgage. The second mortgage can't foreclose on a house unless the first mortgage forecloses first.

0 ( +0 / -0 )

All the effort she and these other housewives put into taking out loans to supplement her husband's income, she could have just put the energy into getting a full-time or part-time job of her own so as to have more extra spending money. But for some women in Japan, after they get married the idea of having to actually work to earn some money of their own rather than having it just handed to them is unheard of and unacceptable.

4 ( +4 / -0 )

While anyone can find themselves a bit short occasionally when an unscheduled expenditure suddenly crops up, regular loans of 40,000 to 50,000 yen a month are proof that Kazuko simply wasn't doing a good job of balancing the family finances, and taking what seemed the easy way out instead of tackling the problem head-on. While the lawyer's bill for 210,000 yen seems a bit steep, putting her on the blacklist was doing her a favour. Now she'll be forced to do what she should have been doing before, balancing the books. Whether she does that by cutting back on expenditure or by getting a job herself doesn't really matter, so long as she does it. Taking out secret loans is a big no-no.

5 ( +6 / -1 )

Sounds like a lot of "Sagi" happening there.

If you read the law as to who and what can charge what interests, rather eye-opening.

Yes, anyone can slip up and forget payments but usually the terms are in the contract. Just need to keep informed and on top of things.

0 ( +0 / -0 )

The guy was earning 6million a year, why did she need 40-50,000yen a month? Sounds like she had a gambling problem.

1 ( +2 / -1 )

There is always the world's oldest profession in waiting.

I hate to agree with you @ Reckless but this happens regularly, as often as not with the knowledge and understanding of unemployed husbands. But the authorities have been cracking down relentlessly on prostitution as well. I'm reminded of Anatole France's observation about the fairness of the laws, which forbid both the rich and the poor from sleeping under bridges, begging in the streets and stealing bread.

-1 ( +0 / -1 )

Cleo - Amen! I was thankfully weaned off credit as a high school student when my mother made me a co-signer on her Visa and I wound up in a $2,000 hole: nothing for an adult, but daunting for a kid. My pleas to my mother met with not only with sympathy but the best gift she could give me: advice - save, pay it off yourself, and let that be a lesson to you.

Parents should educate their children about debt through experience at a young age.

0 ( +0 / -0 )

Back in the days when we both worked at salaried jobs, when I needed money I could borrow with the ATM card, she says. Now I dont know if I should use the bank or dig into my savings.

Your savings? Or do you mean the family's savings? I am sure you were not running a debt without your husband knowing and then trying to pay it off with his salary while never touching a yen of your savings?

Right?

1 ( +1 / -0 )

Christ have these women never thought of a) not shopping and spending money on themselves b) working to get the money they need c) that not speaking to their husband about this is not good? I read this crap and shake my head. Why oh why were these women allowed a loan in the first place??? They have NO income!! More laws like this are needed!

1 ( +1 / -0 )

People really need to start living within their means. I don't make a lot but I'm able to not only stay within my budget but also put some away every month. These housewives should be discussing money matters with their husbands and decide together if they need a loan or if they should just dip into their savings. It seems like whatever they need the money for though is a secret that they are keeping that can cause major issues for the family.

0 ( +0 / -0 )

The husband should have firm control of the finances of his family. i am concerned about why a wife could not talk to her husband about any financial problems. Even if as someone suggested she had a gambling problem the husband must support the wife to deal with the problem and prevent it returning. If couple cannot talk to each other about problems within the family then there is bound to be serious trouble.

Perhaps we could start having some governemnt sponsored money management courses for those who hve had problems taking out loans. Firmer laws are also needed to clamp down on illegal money lenders.

-1 ( +1 / -2 )

No pity from here. All she had to do was discuss the financial situation with her husband, and then work out a way to deal with the problem. But no, I guess it was her that caused a worse problem, and now she is blacklisted - is that all?

0 ( +0 / -0 )

i am concerned about why a wife could not talk to her husband about any financial problems. Even if as someone suggested she had a gambling problem the husband must support the wife to deal with the problem and prevent it returning. If couple cannot talk to each other about problems within the family then there is bound to be serious trouble.

Amen to that. Here`s a wild, crazy idea: how about sitting down with your husband, explaining that there is a financial problem arising, and figuring out between you the best way to solve it, either by getting a part/full time job, him getting some overtime, or cutting back on expenses? Some marriage these people have, if they are going behind each others backs to borrow money.

0 ( +0 / -0 )

Totally agree with Cleo.

0 ( +0 / -0 )

The law didn't create desperate housewives; the housewives did it to themselves, and in the long run it will spare more desperation.

2 ( +2 / -0 )

I can't think of a situation, when a breadwinner does not know, how much he earns and the amount his family spends. No doubt the husband of Kazuko was aware of her debts. Otherwise he was uninformed about the famlily's financial plight. BTW, has anyone seen that MLBL? I don't think it was such a severe law as they say. Perhaps that's just another hit on the current gov't to show it deserves no credit?

0 ( +0 / -0 )

There is always the world's oldest profession in waiting.

There is such a site that has so-called "Japanese Housewives" that you can pay to have video chats with. They get a fee from chatting with you. From what I have read, many of them do so and their husbands don't know.

The husband should have firm control of the finances of his family. i am concerned about why a wife could not talk to her husband about any financial problems.

I find it interesting here in Japan that the husband goes out and works, and is put on a allowance by the wife that doesn't work. I canunderstand dividing up responsibilities, but if I am working, I at least want to know where the money is going that I am turning over. If anything, I would at least look at a bank statement to at least say "it is worth going to work everyday" and not just go blindly on my way.

0 ( +0 / -0 )

I agree with Steve - who would have thunk it?? I also think that if the man makes the money, the man controls the money. If both husband and wife are working, THEY control it. Works for us. No idea how these guys let these women just take over the family finance as they know very little about balancing figures. How would they living at home with mommy and daddy and having them pay for everything. At least many of the guys live in company dorms so have a clue!

0 ( +0 / -0 )

Obviously the law is not the problem. On the contrary, it seems to work fine to avoid people getting into even worse situations.

0 ( +0 / -0 )

@Jeff: if she had control of the Inken, then the husband is libel as those are registered in his name.

1 ( +1 / -0 )

Десу ГрачкинJul. 13, 2011 - 08:34PM JST

I can't think of a situation, when a breadwinner does not know, how much he earns and the amount his family spends. No doubt the husband of Kazuko was aware of her debts. Otherwise he was uninformed about the famlily's financial plight. BTW, has anyone seen that MLBL? I don't think it was such a severe law as they say. Perhaps that's just another hit on the current gov't to show it deserves no credit?

It's quite easy, really. Traditionally men in Japan turn over their entire salary each month to their wife, and she gives him an allowance for snacks, drinking, etc. And the rest of the money she budgets towards all the household expenses. If the wife doesn't state that there's a problem, the husband just assumes all is going well.

It probably wasn't a situation that the husband wasn't earning enough money to be aware that they should be having financial problems. What was likely the case is wifey was a shopoholic or had a gambling problem, and was taking out the loans to make up for the money she was squandering that was supposed to be going towards the household.

1 ( +1 / -0 )

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